Dalmia Bharat Enterprises Limited | Annual Report 2011-12

Between the challenge and the answer lies the ‘How’. ‘How’ is the definition of ability, application and execution. In less than favourable times, ‘How’ rises to include lateral thinking, creativity and strategic intent. Dalmia Bharat hinged the year on ‘How’ and performed better than the industry. The exclamation mark conveys ‘How’ and all that is outstanding, remarkable and distinctive in its appeal.

Our Values

How

Strategic Blueprint

Letter to Shareholders

The Talking Points

Beyond Business

Growing Sustainably

Towards Self-Actualisation

08

02

Annual Report 2011-2012 1

How Our Numbers Performed

Board of Directors

Corporate Information

Management Discussion & Analysis

Financial Highlights

Directors’ Report

Report on Corporate Governance

Financial Statements

323738

36

Dalmia Bharat EntErprisEs limitED (DBEl) is EngagED in thE

BusinEss of CEmEnt, rEfraCtoriEs anD powEr. sharEs of thE

Company, whiCh is a DE-mErgED Entity of Dalmia (CEmEnt) Bharat

limitED, arE listED on thE national stoCk ExChangE (nsE),

thE BomBay stoCk ExChangE (BsE) anD thE maDras stoCk ExChangE

(msE) sinCE January 2011.

it aChiEvED an annual ConsoliDatED total inComE of

`2,418 CrorE with ConsoliDatED EBitDa of `588 CrorE for thE yEar

EnDing marCh 31, 2012.

Dalmia Bharat Enterprises Limited2

Management Discussion & AnalysisHOW Letter to the Shareholders

our values

Fire represents our Value of Learning. The fire within is a source of curiosity. It promotes learning. Applied creatively, learning fosters innovation.

Water represents our Value of Team Work, Trust, Mutual Respect, Flow and Collaboration. Being the best solvent, it absorbs and mixes with all elements.


FinancialsCorporate GovernanceFinancial Highlights

Our Values are captured in the Acronym of ‘Let’s Excel’: lE: Learning t: Teamwork s: Speed Excel: Excellence

Air represents our Value of Speed. Air empowers and evokes passion; and nurtures growth. Air denotes the fastest mode of travel.

Earth represents our Value of Excellence. Focused around the Sun, Earth’s ability to withstand extreme heat and pressure is essential for taking on big challenges.


HOW Letter to the Shareholders Management Discussion & AnalysisHOW

HoW


Financial Highlights Corporate Governance Financials

HoWIt was a difficult year, which saw the cement industry face unprecedented challenges. A year in which average performance evoked surprise. A better than average performance raises the inevitable question: “HOW” was the Company able to swim against the tide?

By lateral thinking, self-actualising our intrinsic strengths, applying creative solutions, we manoeuvred turbulence in the industry to post results which raise eyebrows. This report narrates the “HOW” of our business play on a turf strewn with obstacles.


HOW Letter to the Shareholders Management Discussion & AnalysisManagement Discussion & AnalysisHOW



Reasonable people and organisations adapt themselves

to the world. Unreasonable people

and organisations persist in trying

to make the world adapt to themselves.

All progress, therefore, depends on the productively

unreasonable.

Our answer to HOW we have travelled our journey of

excellence, improving our operational performance

through several value-enhancing initiatives…


HOW Letter to the Shareholders Management Discussion & Analysis

Our business portfolio comprises

cement, refractories and thermal

power. It is steered by a talent

pool of 1,256 employees.

stratEgiC partnErship

Our partnership with Kohlberg Kravis and Roberts (KKR), forged in FY11 through our subsidiary Dalmia Cement (Bharat) Limited (DCBL), marked an inflection point in our growth trajectory. KKR currently holds 15% stake in DCBL.

For the next stage of its growth, DCBL plans both greenfield and brownfield expansions. The Company also operates cement capacity and refractories through its listed entity, OCL India Limited, in which it holds 45% stake.

Collaborating with best-in-class equity partners and leading private equity players - KKR and Actis - we have continuously delivered higher than market growth (our five-year CAGR is more than the market growth).

strategic Blueprint

Proven capabilities in project execution, strong customer relations, complemented by well-synchronised logistic and marketing initiatives, have been the key contributors in our growth. We grew at an accelerated rate, from 13% in FY11 to 17% in FY12, in the southern markets.

With a lower than industry average capex spread across four locations in three states (Tamil Nadu, Andhra Pradesh, Odisha), we have an attractive project portfolio. We achieved significant volume growth of 17% year-on-year at 5.4 MnT for FY12, which was significantly ahead of industry growth.

Management Discussion & AnalysisHOW



Industry Growth (FY12) Dalmia’s Growth (FY12)

pioneers in super

specialty cement

* Including Maharashtra

Tam

il N

adu

& K

erel

a

Kar

nata

ka

Sou

th In

dia*

14%

29%

17%

4% 3%

9%



stratEgiC initiativEs During fy12

Following the de-merger of our business over a year ago, we have continually improved our performance through various value-enhancing initiatives.

With a strong focus on expanding across the north-eastern

committed to innovation and operational improvement

region, we agreed to acquire 50% stake in Assam-based Calcom Cement, for a consideration of `238 crore. This acquisition gives us access to an expandable capacity of 2.1 MnT PA along with the much-needed fillip to expand and grow our footprint.

As part of our growth strategy, we have continually focused on augmenting capacities and improving efficiencies. We demonstrated this by commissioning two greenfield projects: at Ariyalur and Kadapa and one in OCL Limited. We commissioned a split grinding unit at Kapilas and a brownfield expansion at Rajgangpur, Odisha. With these, we stand at 15.6 MnT capacity, (post commissioning of Calcom capacity).

Other strategic initiatives in this direction included commissioning of the Cross Country Conveyor Belt (CCBC); commissioning of Captive Power Plant (CPP) Unit I & II at OCL, Rajgangpur; completion of negotiations on the Cement Mill order for OCL Grinding Unit at Midnapur (West Bengal).




We also continued to grow in our core markets of Tamil Nadu, Kerala, Andhra Pradesh and Karnataka, where we are confident of better growth rates in the coming quarters, backed by demand from both, trade and non-trade sectors.

We completed work on railway sidings at Kadapa, Andhra Pradesh. The logistic cost advantage accruing from this will reduce operational costs.

On the strength of bulk supplies, we secured long-term orders from several leading infrastructure players. We also secured a substantial order due to conversion of PPC (Portland Pozzolana Cement) to PSC (Portland Slag Cement). This enabled us to expand our project portfolio in the eastern region.

Enhancing operational excellence

We are committed to a culture of continuous improvement and innovation at the grassroots. Our operating mantras of asset

optimisation and our position as a least cost producer have enabled us to build a strong foundation of technological and operational excellence. This is evident from our improved level of capacity utilisation at 66%.

In our endeavour to continuously embed sustainability across our operations, we initiated work on Alternate Fuel & Raw Materials (AFR) during the year. To strengthen operational efficiencies, we increased the usage of pet coke and adopted high moisture coal to optimise fuel usage at our plants. These measures will have a positive impact on reducing variable cost, making us a leaner and more efficient organisation.

Our initiatives towards captive power generation – optimisation of the performance of turbine efficiency and reduction in specific steam consumption – resulted in savings. We also achieved reduction of auxiliary power consumption to secure better energy savings.



strong capabilities

in project execution




Logistics is another area where we focused, cutting down on time and reducing wastage through improved transportation systems.

Our strong quality and safety thrust found endorsement in the implementation of Integrated Management Systems (ISO 9001, ISO 14001 & OHSAS 18001) in our Ariyalur unit. We commenced the implementation phase of our engagement with M/s DuPont Safety Solutions across the cement business, to further scale our health, safety and environment protection parameters to global standards.

KYC (Know Your Customer) process implementation to enhance quality of customers entering the system and

Endorsing our Success Story

The success of our growth strategy is endorsed by the various awards and recognitions that we bagged during 2011-12.

Green Tech Environment Award 2011 for Dalmiapuram by Greentech Foundation.

ISO 9001, 14001 Certification for Environment protection for Ariyalur unit, and ISO 18000 for OHSAS (Occupational Health and Safety Management Systems).

Ariyalur unit conformed to the Quality Management System Standard: ISO, certified by Det Norkse Veritas.

Best Manufacturing Award for the years 2010-11 & 2011-12 consecutively among the Group companies for Ariyalur.

Higher than market growth and increasing market share

measures to improve our IT network added considerable thrust to our excellence focus.

Power & Refractories

Our Power and Refractories businesses continued to progress in alignment with the Cement business. We sold 9.35 crore units of power to the grid during the year.

Intensive strategic interventions enabled us to report the highest ever revenue in our Refractories business. We are offering to take the cement project order for refractory application on turnkey basis; the cement industry segment continues to be our focus area.

Best SHE (Safety, Health & Environment) Unit Award by the Group for the year 2011-12 for Ariyalur plant.

18 prizes for mines in Tamil Nadu across categories during TNKMSA safety week celebration organised in the state.

Awards for Energy Efficiency and Environmental Management including Confederation of Indian Industry (CII), Bureau of Energy Efficiency (BEE) and National Council of Cement Building Material (NCCB).



letter to tHe sHareHolDers

“the de-merger had a strong positive impact on your company, enabling us to leverage the resultant enhanced focus to combat challenges faced by the industry during the year”

Management Discussion & AnalysisLetter to the Shareholders



inDian EConomy anD thE CEmEnt inDustry

During FY12, the country’s economy grew by 6.9%, which was below expectations. Focus on controlling inflation led to tighter monetary policies and higher interest rates, which affected growth. High current account deficit has resulted in weakening of the rupee. High fiscal deficit of 5.9% of GDP has resulted in limited elbowroom for the Government on manoeuvrability. Thus, overall there are lot of challenges on the economic front in the short run, though the long run outlook for the economy is still quite positive.

Indian cement sector witnessed demand growth of 9.6% in FY12, despite above mentioned challenges. In south India, overall growth was healthy at 9%. However, cost of coal, logistics cost and continued unabated infrastructure constraints adversely affected the real effective capacity.

Company’s pErformanCE

Our growth in sales of 17%, when other major players had close to flat growth in the region, is attributed to continued focus on marketing and brand building activities, as also to significant increase in sales in Andhra Pradesh and Karnataka on account of low base effect. Steps were taken to switch to alternate cheaper fuels like pet coke, lignite to reduce the impact of coal price increase. Commissioning of railway siding at Kadapa in FY13 should help in controlling logistics cost. Our

Dear Shareholders

A year ago, we aligned our strategic roadmap to new and emerging economic and industry demands

through our de-merger. The benefits of this strategic manoeuvre are manifest across our business fabric.

The de-merger has left a strong positive impact on your Company, enabling us to leverage the resultant

enhanced focus to combat challenges faced by the industry during the year.

consolidated net income stood at `2,363 crore and EBITDA at `588 crore, giving an EBITDA margin of 25%.

growth plans

Company has agreed to acquire 50% stake in Calcom Cement Ltd., Assam, with an expandable capacity of 2.1 MnT, which would give us a presence in the new markets of the North-East. This region is growing at a healthy rate and should provide better margins on account of location as well as tax incentives. Your Company is going ahead with one greenfield unit in Karnataka with a capacity of 2.5 MnT through its 100% subsidiary and continues to look for acquisition opportunities.

Before we conclude, we would also like to reiterate that our strategic focus and initiatives, particularly towards enhancing operational execution, shall continue to be the cornerstone of our growth strategy, as they were in the year gone by.

aCknowlEDgEmEnt

Your Company continues to be on its path of sustained value creation and its success so far could not have been achieved without the unstinting support and confidence of all its stakeholders - employees, customers, suppliers, investors, lenders, government and community. We express our sincere gratitude to each one of our stakeholders and urge them to travel together into a bright, promising and profitable future.

Jai Hari Dalmia Managing Director

Yadu Hari Dalmia Managing Director



Q. How would you describe fiscal 2011-12 for the Company?

Strategic Brand and Marketing initiatives: The year in review witnessed a very competitive external environment. We strengthened our position by increased focus on strategic brand promotion and marketing initiatives in our key markets of southern India; this helped us gain better realisations.

Growth through Inorganic route: Due to the current situation of capacity overhang in the cement space, consolidation opportunities need to be leveraged to shorten the time horizon for growth. Convinced on growth in North-East, your Company acquired a 50% stake in Assam based Calcom Cements Ltd., as part of its inorganic growth plan. Calcom has a partly commissioned 2.1 MnT capacity, with expansion of clinker capacity by 1 MnT under implementation.

Look within: The year was also a year of introspection. We evaluated internal processes and systems while devising strategies to optimise efficiencies. In order to curtail the adverse effect of ever increasing coal prices and Rupee devaluation in international currency markets, we opted for alternative fuel usage at our plants, worked on our efficiencies and started using high moisture coal which we purchased at lower rates.

Q. What were the key highlights of the Company’s operations during the year?

Sales better than Competitors: Our sales saw a growth of 17% with 5.4 MnT. This was aided by phenomenal growth in Andhra Pradesh (44%), Karnataka (29%) and Tamil Nadu (21%), indicating the ramping up of our new production units at Kadapa and Ariyalur. We outperformed the overall growth of the industry in south India (including Maharashtra) which was 9% in FY12.

Better Realisations and Recovery of Increased Input Cost: The cement industry faced challenges in the form of increased input costs for the second successive year, particularly hikes in fuel and logistics costs. Your Company was able to mitigate this by passing on the increase in costs through gradual improvement in realisation.

tHe talKing points

“With a strong strategic focus in place, it shall be our continued endeavour to deliver on the growth of both operating metric and earnings.”

Letter to the Shareholders



Improved Operational Efficiencies: Riding on higher diesel prices, logistics costs posed fresh challenges. To address these we focused on a judicious mix of rail and road transport, while optimising our energy consumption, using alternate fuels.

Reinforcing Sustainable Performance: Your Company commenced construction of railway siding at its Kadapa unit; this will grant better access to cement markets of Maharashtra and Karnataka. In our associate Company OCL India Ltd., a 27 MW capacity captive power plant was commissioned at Rajgangpur in February 2012, another power plant of 27 MW in OCL will be commissioned in FY13. These initiatives have given us the advantage of energy self-dependence.

Q. KKR’s investment in the previous fiscal was a key strategic development for the Company. How has this impacted the Company’s performance?

The KKR investment began to yield significant benefits, enhancing our capacity (which now stands at 15.6 MTPA, including the capacity of OCL & post commissioning of Calcom capacity), and market share through organic as well as inorganic routes. We have also benefited from the de-leveraging of our balance sheet and have gained access to the best international governance and business practices.

Q. Can you take us through the key reasons behind the Calcom Cement acquisition?

The North-East is a fast growing market. We realised the importance of gaining a stronghold in the north-east, particularly in Assam. And Calcom is possibly one of the only projects available in Assam. Most other capacities are centred in Meghalaya. We were also impressed with Calcom’s excellent infrastructure, which will give us access to other markets in the region. We clearly foresee opportunity in the region. Potential for long-term sectoral growth in that part of the country is immense. With this acquisition, we have gained the enviable advantage of being an early entrant in that region.

Q. This being the first year of operations post the de-merger, what, in your opinion, were the benefits of the de-merger?

The de-merger was a well thought out strategic initiative aimed at enhancing our fund-raising flexibility. It gave us vital advantage, and insulated us from the volatility in other businesses. It enabled us to fast-track implementation of our growth plans, increase business and investor focus

from the creation of pure play business entities. The mirror split resulting from the de-merger has ensured continuation of experience and understanding of the promoters to all Group businesses.

Q. What are the key factors that shall drive growth for the Company?

With a strong strategic focus it shall be our continued endeavour to deliver growth on both operating metrics as well as earnings. Our thrust on improving our operating efficiencies and keeping our balance sheet strong, remains. We are cognizant of the need to keep pace with changing market scenarios and industry demands through a business approach that is flexible in action while remaining rooted in our core values and principles.

We firmly believe that winning cement companies are those which manage their operations in a way which consistently improves their production volumes and efficiencies. These are the companies which are able to weather adverse conditions to sustain the momentum of their growth at every step of the way. This is our business mantra as we move forward.

Q. Do you plan to undertake any major capacity additions in the coming months? What are the initiatives that you propose to enable better progress for the Company?

With industry capacities on a surplus, and likely to remain so in the coming months, we are not planning any major further expansion at this juncture, barring one greenfield project of 2.5 MnT, which shall be developed over the next two to three years, in south India.

On the operations front, we shall take additional measures to optimise the fuel mix, and increase pet coke and indigenous coal usage. Higher fly ash usage and reduction in heat rate will also be addressed and we shall strengthen our focus on AFR (Alternative Fuel and Raw Materials).

After introducing a growth-oriented business model, we shall continue to enhance our engagement with institutional buyers. We will build on our operating matrices through better price positioning, expansion of direct retail network, strengthening of technical services team, expansion of outdoor marketing presence, optimisation of fleet mix and greater railway movement to improve logistics during the coming months. These initiatives shall help us further enhance our excellence parameters and enable us to boost toplines and bottomlines.

Puneet Yadu Dalmia Director

Gautam Dalmia Director



Value creation that does not go beyond

business cannot have a lasting impact. Holistic growth of an

organisation becomes possible only if it

reaches out to people and communities at

large.

HOW we touched the lives of those we live with...



Businesses operate in an environment influenced by multiple factors. As they practise mundane management, they impact and are responsible to a variety of stakeholders. They must provide requisite value for communities in which they operate. They must also proactively demonstrate sensitivity and responsibility towards the environment.

Since its inception, your Company has been conscious of its responsibility towards the environment and the communities in which it operates. Well before Corporate Social Responsibility (CSR) became a concept, we institutionalised and practised it consistently. This consistent best practice grounded in ethical business operations has been an incremental feature of your Company.

BeyonD Business

15,000Trichy District (Dalmiapuram) - 6 villages covering about

Gulbarga District (Sedam) – 5 villages covering families

Ariyalur District (Ariyalur) - 6 villages covering nearly

YSR District (Kadapa) - 4 villages covering

3,000

6,191

1,382

With the formation of Dalmia Bharat Group Foundation in 2010, our CSR practice was given formal structure. The Foundation focuses on four areas: education, healthcare, livelihood enhancement and civic infrastructure.

strong focus on

csr through the Dalmia

Bharat group Foundation

HOW



Livelihood and Income Generation

We have endeavoured to improve the quality of life in

villages around factory locations. We have done this

through microcredit loans, vocational skill building and

animal husbandry programmes. These initiatives have

benefited atleast 1,000 direct beneficiaries, whose average

earnings increased from `1,500 to `4,000 per month. As

many as 189 women members in self help groups (SHG)

supported by us have created considerable small savings.

These have been augmented by financial support from

NABARD of `3 lakh.

Micro loans for buying milch cattle and for setting up small

businesses have had an appreciable impact on livelihoods.

Those trained on vocational skills are either working or self-

employed.

As our in-house facility for training and developing skills

in construction related trades, the Dalmia Institute of

Construction (DIC) continues to lay emphasis on the

development of a dedicated livelihood programme for

rural youth in the rapidly growing construction sector. The

institute has been established with the aim of addressing

substantial gaps between demand and availability of well-

trained supervisory manpower for the construction industry.

neW programmes

Health & Sanitation

Initiatives through camps, immunisation, pre and post natal

care, weekly clinics in collaboration with primary healthcare

and state departments of health have improved the health of

almost 6,000 men, women and children. The initiative also

comprises enhanced hygiene through mass awareness

programmes. Proactive facilitation with Integrated Child

Development Services (ICDS) and regular seasonal

precautions with support from the Department of Health on

effective service deliveries has yielded better healthcare.

We facilitated 100% immunisation of children less than a

year in age and 100% registration of pregnant mothers for

ante-natal check-up and institutional deliveries. The project

provided for the construction of 55 ISLs (Individual Sanitary

Latrines) in collaboration with the Department of Rural

Water Supply, Government of Andhra Pradesh.

Dalmia Hospital at Dalmiapuram

All of Dalmiapuram’s residents, as well as those from the

surrounding 20 villages, are assured of medical care at our

hospital. A total of 5,249 people, other than our employees,

were treated at the hospital.

HOW



Education

In order to raise the bar on the standard of education,

several initiatives were undertaken. To maintain teacher-

pupil ratio at an optimal 1:40, we sponsored compensation

for teachers at the school. This ensured presence of

teachers, filling up of vacancies and dedicated teaching.

Eighty three students benefited. More than 1,200

students were direct beneficiaries because of repair and

construction of toilets in schools, construction of compound

walls and provision of sports and recreational facilities.

To enable holistic development of children, many extra

curricular and sports activities received financial support.

Many talents were recognised and honoured. Provision of

furniture and utensils at Anganwadi centres benefited 103

children. Prizes for school toppers from the Government

middle school encouraged academic distinction. Fifty five

meritorious students were recognised for their efforts. With

basic computer education, 123 people enhanced their

employability and 150 adults received the gift of literacy

at our Adult Learning Centres. Of these, 90 were illiterate

women who are now able to read and write with ease.

Vivekananda Matriculation School and Dalmia Higher

Secondary School, supported by Dalmiapuram unit,

provide education to more than 2,300 children altogether.



Our planet stands on the brink of

disaster as a result of environmental

degradation driven by businesses working

to the exclusion of their own interests.

Humanity faces annihilation unless

strong measures are taken to make growth environment-friendly

and sustainable.

how we are doing our bit in ensuring a sustainable

tomorrow...



The need for businesses to graduate from sustained profits to sustainable growth cannot be overstated. We have concertedly kept our systems and operations clean and largely pollution-free. We have resolutely kept our plants and the areas around them green. We have determinedly made re-cycling and water harvesting an integral business methodology. We have intensively reduced the heat rate and optimised fuel mix at our plants to keep the environment fresh and healthy.

Each of these measures may not, by themselves, be enough to make a transformational difference; but together, they have drastically improved the environmental health of the regions in the vicinity of our plants.

As part of our Energy Conservation and Environmental Management focus, simple innovative ideas and well planned execution of projects help manage energy with greater efficiency, yielding impressive cumulative results which reduce power consumption. Ideas and techniques have been employed to conserve water and prevent pollution / wastage. Alternate fuels are used extensively to save energy. Larger quantities of eco-friendly masonry cement were produced to save energy. This year too, trees were planted extensively to promote green cover and promote a healthier environment.

Our green initiative: Dalmia Cement EcoTouch, was launched, in collaboration with Exnora Panruti, in Cuddalore district of Tamil Nadu, in September 2011.

The focus on PSC (Portland Slag Cement), which is blended cement, is widely acknowledged to reduce our carbon footprint and we are increasingly moving towards PSC variety of cement from the traditional OPC (Ordinary Portland Cement) to maximise this benefit.

For tapping solar energy more effectively, we phased mercury-based lighting systems inside our plants and are using solar water heaters at our guest houses.

Re-cycling and re-use of solid and liquid waste in our process is another key component of our environment-friendly systems. Rainwater harvesting is a key focus area of engagement and we are continuously working to create awareness on the same in our catchment areas.

Our green focus shall continue to gather momentum as we initiate consistently better processes and systems to keep pace with the environmental movement, which is fast becoming a basic premise of growth in the cement industry.

groWing sustainaBly

HOW



electrostatic precipitators installed at Dalmiapuram plant to reduce pollution



Challenges demand and inspire

responses. they motivate every member of an

organisation to deliver the best.

The performance and success of an organisation can be gauged

in a challenging environment.

Our mantra for success is underlined by this simple

philosophy. It finds an answer to HOW we are always looking

for challenges to boost our future growth...



It is our firm belief that every challenge, imaginatively and coherently addressed, brings out the best in an organisation and generates resilience.

Potential for growth in the cement industry is immense, notwithstanding some recent challenges that we have faced. With our inherent strengths, which we are well-poised to continuously leverage, we have mapped out an exciting growth trajectory for the future.

Our strategic roadmap for FY13 will see us focussing on optimisation of fuel mix and increased pet coke and indigenous coal usage. A more aggressive approach on price shall enable us to keep our targets on track. On the procurement front, we shall explore options of joint procurement/swaps with industry peers to create better price advantage.

toWarDs selF-actualisation

HOW



Enhanced institutional sales, expansion of direct retail network and concentration of marketing and sales efforts in 15 districts shall help us further grow our leadership position in the industry.

On the Logistics front, we shall ensure better systems, including increase of dedicated trucks percentage, shifting to destination-based freight in Tamil Nadu, increase in rail movement through our new railway siding in Kadapa, optimisation of fleet mix, etc.

Cumulatively, these initiatives shall help us to meet our growth targets during the year to come and beyond.

greater focus on

special/branded cement to boost

institutional sales



Particulars fy ending fy12 FY11Total Operating Income ` crore 2,363 1,768Operating Profit (EBITDA) ` crore 588 386 Cash Profits ` crore 369 238 Profits before Tax (PBT) ` crore 270 71 Profit after Tax (PAT) ` crore 143 50 Share Capital^ ` crore 16 16 Reserves & Surplus ` crore 2,875 2,761 Loan Funds ` crore 1,829 1,930 Net Block* ` crore 3,571 3,709 Net Current Assets ` crore 491 814 Operating Profit Margin % 24 21Net Profit Margin % 6 3Return on Average Net Worth % 5 2EPS (fully diluted) ` 17.67 6.13 Cash EPS (fully diluted) ` 45.44 29.33 Net Debt Equity Ratio x 0.46 0.46 Interest coverage x 3.05 1.41 Current Ratio x 1.78 3.05 Dividend Rate % 75 63Dividend Payout Ratio % 10 20Share Price ` 144 185 Market Capitalisation# ` crore 11,671 15,020

Previous year figures have been regrouped/rearranged wherever necessary to make them comparable with those of current year.

^ Face Value `10 per share, split to `2 per share in FY06.

* Includes Capital Work in Progress

# Based on shares outstanding at year end

FinancialHigHligHts


Corporate Governance FinancialsFinancial Highlights

■ EBitDa/tonne fy11

Q1 Q2 Q3 Q4

■ EBitDa/tonne fy12

Cement - EBitDa per tonne (`)

851

1,04

6

1,33

089

9

529

926

162

1,08

1

Cement - Net Sales Realisation per Tonne (`/mt)

Q1 Q2 Q3 Q4

3,75

3 4,18

9

3,93

8 4,29

4

3,31

6 3,92

0

2,77

54,

016

■ Net Sales Realisation/Tonne FY11■ Net Sales Realisation/Tonne FY12

Cement - Production & Despatches (MnT)

2010-11

4.67

4.64

2011-12

5.38

5.39

2007-083.

293.

282008-09

3.38

3.39

2009-10

4.07

4.08

■ Cement Production (MnT)■ Cement Despatch (MnT)

Cement - Product Mix FY12 (%)

3%

37%

60%

opC ppC others

Cement - Geographic Mix FY12 (%)

4%

12%

12%

22%

Tamil Nadu Kerala karnataka ap others

50%



Board of Directors

pradip kumar khaitanChairman and Independent Non-Executive Director

Mr. Pradip Kumar Khaitan has over 46 years experience across industry. He was co-opted as a Director of the Company in February 2011. He holds LL.B. degree from the University of Calcutta. A partner in Khaitan & Co., Solicitors and Advocates, he has extensive legal and commercial experience. Mr. Khaitan serves as director for several public limited companies: CESC Limited, Electrosteel Castings Limited, Graphite India Limited, Hindustan Motors Limited, India Glycols Limited, OCL India Limited, Pilani Investment & Industries Corporation Limited, TCPL Packaging Limited, Dhunseri Petrochem & Tea Limited, VISA Steel Limited, Warren Tea Limited and Woodlands Multispeciality Hospital Limited.

Jai Hari DalmiaManaging Director

Mr. J. H. Dalmia holds a B.E. degree in Electrical Engineering from Jadavpur University and a Master’s degree in Electrical Engineering from the University of Illinois, Urbana, Champagne. He was co-opted as a director of the Company in February 2011 and elevated to Managing Director in April 2011. Mr. J.H. Dalmia has more than 40 years of experience across industries; with a special focus on refractory, sugar and cement sectors. A holder of various patents, Mr. J. H. Dalmia is keenly involved in research and development.

Yadu Hari DalmiaManaging Director

Mr. Y. H. Dalmia holds a B.Com (Hons.) degree from the University of Delhi and is a Fellow of the Institute of Chartered Accountants of India. He was co-opted as a Director and later elevated to Managing Director of the Company in February 2011. He holds about 39 years of experience in the cement industry. Mr. Y. H. Dalmia has served as President of the Cement Manufacturers Association and is a well known figure in the cement industry.


Financial Highlights FinancialsCorporate Governance

Puneet Yadu DalmiaNon-Executive Director

Mr. Puneet Yadu Dalmia holds a B.Tech. degree from the Indian Institute of Technology, Delhi and is a gold medallist from the Indian Institute of Management, Bangalore, with specialisation in Strategy and Marketing. He was co-opted as a Director of the Company in February 2011. Mr. Dalmia has 15 years of experience in cement industry, having started his career as the co-founder and chaired one of the most profitable e-recruitment websites in India, which was later acquired by monster.com, a Nasdaq listed multinational company. Mr. Puneet Yadu Dalmia, as Managing Director of group companies, Dalmia Cement (Bharat) Limited and Dalmia Bharat Sugar and Industries Limited, conceptualised the growth strategy and governance architecture of the group to focus on its core businesses and is spearheading the growth plans for the group.

Donald Macinnes Peck Independent Non-Executive Director

Mr. Donald Macinnes Peck holds a masters and a doctorate in Economic History from the University of Oxford. He was nominated as a Director of the Company in October 2010. Mr. Peck’s expertise lies in emerging markets investing, both in the equity investment/fund management business. His previous appointments with the International Finance Corporation and investment banks, Lloyds Bank and Morgan Grenfell, grant him a wide perspective of business and financial dynamics. He has also served with CDC Capital Partners, leading the development of its equity investment business and establishing its fund management business worldwide. Having run the CDC/Actis private equity business in India from 1995 to 2007, Mr. Peck became one of the senior founding partners in Actis in 2004.

Gautam DalmiaNon-Executive Director

Mr. Gautam Dalmia holds B.S. and M.S. degrees in Electrical Engineering from Columbia University. He has 19 years of experience in the cement and sugar industries. Mr. Dalmia was co-opted as a Director of the Company in February 2011. As Managing Director of group companies, Dalmia Cement (Bharat) Limited and Dalmia Bharat Sugar and Industries Limited, he is directly responsible for managing the operations of the cement and sugar businesses and leads execution of projects. He also provides leadership to the commercial functions for the group.



v.s. JainIndependent Non-Executive Director

Mr. V.S. Jain is a fellow member of the Institute of Chartered Accountants of India and Institute of Cost and Works Accountant of India. He graduated from Shri Ram College of Commerce, University of Delhi. Mr. Jain began his professional career with Indian Oil Corporation and was engaged over 26 years in various capacities. He was responsible for financial strategies and implementation and financial appraisal of projects. As Executive Director, his responsibilities included international negotiations for procurement of crude and petroleum products. He was later selected as the Chairman of Steel Authority of India, until July 2006. Post retirement, Mr. Jain was associated with the Jindal Group as Managing Director and CEO of Jindal Stainless Limited. He was also nominated as a Member of the Public Enterprises Selection Board, which post he held till July 2011.

Bharat anandIndependent Non-Executive Director

Mr. Bharat Anand is partner, Khaitan & Co. He was co-opted as a Director of the Company in October 2010. Mr. Anand is a graduate in Economics from the University of Delhi; he studied Law at the University of Cambridge, as a Cambridge Commonwealth Trust Scholar. Prior to joining Khaitan & Co., Mr. Anand worked at the London offices of Freshfields. He has advised several multinationals on their Indian investments and joint ventures. He regularly advises Indian entities engaging in offshore investments and acquisitions. The U.K. based RSG Consulting featured Mr. Anand in their list of top 25 ‘second generation lawyers’ in India.

N. GopalaswamyIndependent Non-Executive Director

Mr. N. Gopalaswamy holds a B.Sc. degree in Chemistry from Madras University and a B.E. degree in Chemical Engineering from Annamalai University. He is a member of the Institute of Industrial Engineers, USA, the Indian Institution of Industrial Engineering, the Indian Institute of Chemical Engineering, and the Institution of Engineers (India). He is a Council Member of the Tiruchirapalli Productivity Council and has over 44 years of experience in the cement industry.


Financial Highlights Corporate Governance FinancialsCorporate Governance

corporate inFormationBoard of Directorsmr. pradip kumar khaitanChairman and Independent Non-Executive Director

Jai Hari DalmiaManaging Director

Yadu Hari DalmiaManaging Director

Gautam DalmiaNon-Executive Director

Puneet Yadu DalmiaNon-Executive Director

Donald Macinnes PeckIndependent Non-Executive Director

N. GopalaswamyIndependent Non-Executive Director

Bharat anandIndependent Non-Executive Director

v.s. JainIndependent Non-Executive Director

auditorsStatutory AuditorsS.S.Kothari Mehta & Co.

Internal AuditorsKPMGBuilding No. 10, 8th Floor,Tower – B,DLF Cyber city, Phase – IIGurgaon – 122002, India

Head Office11th & 12th Floors, Hansalaya Building15, Barakhamba Road, New Delhi - 110 001

Registered OfficeDalmiapuram 621 651District Tiruchirapalli, Tamil Nadu

BankersPunjab National bankAxis Bank LimitedBank of BarodaBNP ParibasCanara BankCentral Bank of IndiaCorporation BankOriental Bank of CommerceIndian bankVijaya BankLakshmi Vilas BankUnited Bank of IndiaLandesbank Baden-WurttembergState Bank of IndiaYes BankICICI Bank Ltd.IDBI BankThe Hong Kong and Shanghai Banking Corporation LimitedDBS Bank Ltd.Vijaya BankState Bank of Mysore



MANAGEMENT dISCUSSION ANd ANALYSIS Economic scEnario and outlook

During the year, the Indian economy grew only by 6.9%, against 8.5% in the two preceding years, mainly on account of poor industrial growth of only 3.9%. Near double digit inflation, for the past 2 years, forced the government, to follow tight monetary policy, which impacted growth. During the latter part of the year, inflation moderated & it is expected to stabilise, though some uncertainty remains. Fiscal deficit increased to 5.9% of GDP, against 4.6% projected earlier. High crude prices, impact of which could not be passed to the consumers to rein in inflation, resulted in steep increase in subsidies. Fiscal deficit target for FY13 is 5.1% of GDP, which could be challenging; infrastructure bottlenecks have

started appearing with lot of power capacity idling for want of fuel.

During FY13, it is expected that the economy would grow at 7.6%. Government is committed to keep central subsidies within 2% of GDP, by reducing leakages & partly passing the burden of high crude prices. Trade deficit during FY12 ballooned to $185 billion, 56% higher than FY11, which is a matter of grave concern. Current account deficit for FY12 is estimated at about $67 billion, 4% of GDP. While exports grew by 21%, imports grew by 31%. Growth in exports, in the last few months of the year, was in single digit, due to global slowdown. With high crude prices not so encouraging on export front, on



account of uncertainties in Europe, reigning in current account

deficit, is going to be challenging. Thus, rupee is expected to

be under pressure.

BusinEss ovErviEw

As reported last year, your Company was carved out of Dalmia

Bharat Sugar & Industries Limited, formerly known as Dalmia

Cement (Bharat) Limited as a result of business restructuring,

wherein, cement business and related captive power plants

vested in the Company as shown below:

34% increase in DBEL

consolidated total income

dalmia Bharat EntErprisEs ltd. (DBEL)

Dalmia Refractory

dalmia cEmEnt (Bharat) ltd.(85% is held by DBEL and 15% by KKR*) Operating Cement Capacities of 8.2 MnT

dalmia powEr ltd. (100% holding of DBEL)

dalmia cEmEnt vEnturEs ltd. (100% held by DCBL)

Plan for green field cement projects

ocl india ltd. 45% is held by DCBL

Operating Cement Capacity of 5.3 MnT, Thermal Power of 27 MW and Refractories

dcB powEr vEnturEs ltd. Dalmia Power Ltd. holds 74% & 26% is held by Dalmia Cement

(Bharat) Ltd.Thermal Power of 72 MW.

dalmia refractories (dalmia Bharat Enterprises limited)

Dalmia Refractories is servicing most of the producers in the Indian cement industry and continues to get the product manufactured on job work basis. The production volume for FY12 for the refractory business which got manufactured on job work basis was 50,667 MT, as compared to 49,414 MT in the previous year, reflecting an increase of 3%. Sales volume increased by 5% year-on-year to touch 49,493 MT. Slowdown in capacity addition in cement industry has adversely affected the demand emanating from project orders. The Unit continues to depend on imports for its key raw material (refractory grade Bauxite) from China. Its structured “Customer Contact Programme” helped it maintain its leadership position, which further enabled it to increase its market share in cement maintenance for Alumina refractories.

Financial highlights

Total Income for DBEL standalone for the year ended 31st March, 2012 stood at `181 crore, as compared to `148 crore, indicating

an increase of 23% over the previous year. EBITDA for FY12 stood at `19 crore as against `18 crore for FY11, indicating an increase of 9%.

outlook

While long-term outlook for cement industry, to which our refractory business caters, is expected to be good, in the short-term, capacity addition in cement industry would continue to be low because of significant supply demand mismatch. The fragmented and competitive nature of this business will continue to pressurise margin.

* Kohlberg Kravis Roberts



The Company will continue to explore opportunities to diversify into non-cement sectors such as steel, glass and coke-oven.

cement business [dalmia cement (Bharat) ltd.]

industry overview, developments & outlookDuring FY12, all India domestic consumption grew by about 9.6%, to reach 237 MnT (Million Tonnes). Of late, cement demand seems to be reviving strongly including in South, except Andhra Pradesh, due to political turmoil in the State. New capacity added during the year was about 23 MnT, as compared to 33 MnT in FY11, indicating slowing down in capacity addition. The all India capacity as on 31st March, 2012 stood at 332 MnT and it is expected to reach 406 MnT by the end of FY15.

During FY12, the total consumption in South (including Maharashtra) grew by 9% reaching 95 MnT. During the year, about 11 MnT of new capacity was added in South. Capacity in southern region as on 31st March, 2012 stood at 152 MnT and is expected to reach 186 MnT by the end of FY15. Though in the short-term, demand-supply mismatch poses challenges, in our opinion the long-term outlook of the industry remains positive.

Following two consecutive years of sluggish demand, more meaningful demand growth can reasonably be expected

in coming years. Infrastructure spends are expected to improve during the 12th Five-Year Plan (2012-17) where typically 15% of the Plan expenditure is spent. It is expected that the investment in infrastructure is expected to touch 10% of GDP during the 12th Five-Year Plan from the range of 5-6% it has seen during 11th Plan.

Housing is expected to be the biggest demand driver for cement. Urban housing too will generate better demand, with increasing affordability and the potential of slow return to a softer interest rate cycle. Rural housing and construction activity is also expected to pick up.

Going forward, we continue to expect stronger demand scenario coupled with uncertainty for input costs which are likely to increase further. This might neutralise the impact in contribution attained due to higher demand and would likely result into stable EBITDA.

Financial overview

During FY12, the cement business continued to surge ahead with better growth in demand in South, and lower new capacity addition. Infrastructure bottlenecks (e.g. non availability of coal, power cuts etc.) significantly impacted the effective capacity of the industry. DCBL’s clear approach to address the challenges of achieving asset optimisation and maximising cost efficiencies yielded fairly good results.

Successfullycommissioned

Railway siding at Kadapa

(AP)



All round increases in input costs continued unabated. Prices of imported coal went up steeply by about 15%. However, the Company was able to control power costs from CPPs, by switching to alternate fuels. Similarly, increase in diesel cost impacted logistics cost.

Healthy growth in cement consumption in the South has helped the Company to pass on the cost increases. This, coupled with increased sales volume of 17%, has helped the Company to improve its EBITDA.

With steep increase in the price of imported coal, the Company switched partially to alternate fuels, like pet coke and lignite. Also, a good portion of imported coal was contracted at fixed rates. All this helped to some extent in containing the increase in energy costs.

Increase in freight and logistics costs was controlled by optimising the lead distances. The work of the Railway siding at Kadapa (Andhra Pradesh) was successfully completed in April 2012. This will help serve long distance markets from the location and reduce usage of trucks. During the year, sale of surplus power from CPP has dropped to 935 lakh KWH from 1,541 lakh KWH in FY11 on account of lower rates offered by TNEB. During FY13, this window of opportunity may go down further with improved power situation in TN.

OCL India Ltd. in which the Company has a stake of 45%, had an EBITDA of `207 crore vs `314 crore in FY11. Sales volume decreased from 3.34 MnT to 3.17 MnT. A 27 MW Captive Power Plant was commissioned in FY12, and second unit of same capacity is expected to be commissioned in FY13, to facilitate supply of uninterrupted power. OCL has also taken the decision to instal a Grinding Unit of 1 MT in West Bengal, which should get commissioned in FY14.

marketing initiatives

The process of brand building continued in the year with significant investments in all key markets. The key strategy has been (a) building brand awareness and (b) increasing conversion scores. This resulted in enhanced visibility and awareness of the brand especially in the new markets of Andhra Pradesh and Karnataka, and consequently increase in overall market shares.

The “TecMobile” Service was extended to more markets. Its unique concrete testing service has become very popular in disseminating right information and guidance right at the customers doorstep. Responding to the very positive response, the Company has planned significant investments for this initiative in the coming year.



Go Green

The Company’s “Go Green” initiative, which includes building on the flora and fauna around the facilities, continued with the same momentum.

Approximately 80,000 trees have so far been grown in and around the Company’s Dalmiapuram (in Tamil Nadu), extensive lawns have been developed around all the facilities and almost 1,000 trees are planted around the Government Hospital in Panruti (Tamil Nadu).

As part of its efforts towards recycling and reusing the solid waste/liquid waste, DCBL utilised about 1,399 MT of lime sludge in the cement kiln in FY12 and plans to co-process substantial amount of lime sludge during FY13 also.

In FY12, Alternate Fuel Feeding system was installed in the Dalmiapuram plant for utilising Municipal Solid Waste (MSW).

A high capacity plastic shredder was installed and waste plastics are now shredded and utilised in the kiln as a fuel substitute.

DCBL’s sustainable development teams are looking at mechanisms to utilise industrial waste from chemical, steel, sugar, pharmaceutical, automobiles and other industries, as well as exploring the possibility to use bio fuels like rice husk, sawdust, etc.

The Company is planning to install a waste heat recovery power project at its Kadapa unit, to generate about 5 MW of power. This is a resource of renewable energy from waste.



Quality, safety & awards

Integrated Management System (ISO 9001, ISO 14001 & OHSAS 18001) was implemented in the Ariyalur unit during the year. With this, the entire cement business got certified for all the three systems, including OHSAS.

Progress continued to be made in the implementation of DuPont Safety Engagement, which will enable the Company to further improve its safety standards and bring in safety excellence in the work place.

The Company’s green initiatives have been appreciated and have won various awards.

To sharpen its focus on sustainability, the Company has commenced working on the Cement Sustainability Initiative Forum (CSIF is a part of World Business Council for Sustainable Development); DCBL is amongst the three Indian Cement Companies to do so.

Growth plans

During January 2012, the Company agreed to acquire 50% stake in Assam based Calcom Cement Ltd. The Company has an installed cement grinding capacity of 1.7 MnT, and is executing a new clinkerisation unit of 3000 TPD, with which its clinker capacity would go up to 1.3 MnT by FY14. The Company is eligible for all the financial incentives available to units in North-East. Total cement demand in North-East is estimated at about 6 MnT (growing at 10% plus) of which about 2 MnT is moving from mainland.

Cement business is also planning a Greenfield 2.5 MnT capacity through DCBL’s 100% subsidiary, Dalmia Cement Ventures Limited, and it is expected to go on stream by FY15; orders for main machinery have already been placed.

ISO 9001,ISO 14001 &

OHSAS 18001 certified



consolidatEd Financials

Profit & Loss Account Analysis

total income

The Company’s Total Income stood at `2,418 crore in FY12; this was primarily driven by improved realisations and increased volumes in cement sales by 17% from 4.6 MnT in FY11 to 5.4 MnT in FY12.

operating Expenditure

• Total operating expenditure of the Company stood at `1,775 crore in FY12.

• Power & Fuel cost incurred in FY12 was at `673 crore, which was higher on account of increase in the prices of imported coal and higher production also.

• Freight cost stood at `317 crore in FY12. Higher cement despatch and increased diesel prices led to increase in logistics cost.

• Employee cost stood at ̀ 144 crore in FY12, on account of salary hikes and new recruitments.

• Other expenses incurred during the year stood at `389 crore.

operating EBitda

Operating EBITDA improved significantly in FY12 at ̀ 588 crore from `386 crore in FY11, witnessing a jump of 52%; improved cement realisations and better operational efficiencies were the major contributor.

depreciation

Since there was no substantial capex undertaken during the year, the Depreciation cost stood almost stagnant at `182 crore in FY12.

Financial charges

Repayment of the debt outstanding during the year led to decrease in the Financial Charges from `172 crore in FY11 to `151 crore in FY12.

other income

Other Income for the year was `55 crore, mainly on the back of profit on sale of investments of `26 crore, Interest from Bank Deposits `16 crore and Dividend Income from Current Investments `13 crore.

total tax Expense

Total Tax Expense stood at `123 crore, which mainly includes current tax of `77 crore, MAT Credit charge of `6 crore and Deferred Tax of `40 crore.

Net Profit

Net Profit was to the tune of `148 crore in FY12. Consolidated Net Profit after considering the share in OCL, associate Company’s Profit and Minority Interest, stood at `143 crore.

Balance sheet analysis

capital structure

The Company’s paid up Equity Capital stood at `16.24 crore as on March 31, 2012, comprising 8,11,89,303 equity shares of `2 each (Fully paid up).

of the above:

(i) 8,09,39,303 shares were allotted as fully paid-up pursuant to scheme of arrangement between the Company and Dalmia Cement Bharat Limited, DCB Power ventures limited, Dalmia Bharat Sugar and Industries Limited (formerly Dalmia Cement (Bharat) Limited) without payment being received in cash.

reserves & surplus

The Company’s Reserves and Surplus was to the tune of `2,875 crore in FY12. Of this, the surplus in Profit & Loss Account was `143.45 crore and appropriations to Debenture Redemption Reserve were attributed to the tune of `9.8 crore.

Loan Profile

The Total Loan funds of the Company stood `1,829 crore in FY12. Long-term Secured loans at `1,429 crore comprise 78% of the total loan funds. Out of the total Long-term Secured

SignificantImprovement in Operating EBITDA by

52%



Loans, `102.4 crore is to be repaid during FY13.

total assets

Total Assets of the Company increased to `5,642 crore in FY12. The Company’s Net Fixed Assets as proportion of Total Assets were at 63% at the end of the year.

Fixed assets

The Company continues to upgrade its infrastructure and technology across its manufacturing facilities. Capital Work-In-Progress for the year was `116.5 crore, taking the Net Fixed Assets to `3,571 crore.

investments

Cumulative investments of the Company stood at `1,194 crore including strategic investment of `454 crore in OCL (45.4% stake), `16.5 crore in Quoted equity and other investments in money market mutual funds stood at `415 crore.

inventories

Inventories stood at `261.5 crore in FY12 comprising 61% of stores spares of ̀ 158.4 crore, Work In Progress of ̀ 37.4 crore, Raw Material Inventory of `25.7 crore and Finished Goods Inventory of `40 crore.

sundry debtors

The debtors of the Company stood at `135.5 crore in FY12, of which only `4 crore are more than six months old.

loans and advances

Total Loans and Advances amounted to ̀ 412 crore, comprising 7.3% of the Company’s total assets. Short-Term Loans and Advances were `225 crore, primarily on account of deposits and balances with Government departments and other authorities.

cash & Bank Balance

The Company had a Cash & Bank Balance of `66 crore on 31st March, 2012.

current liabilities

Current Liabilities was at `633 crore comprising mainly of sundry creditors of `151 crore, and also includes Short-Term Borrowings and Current Maturity of Long-Term Borrowings.



csr

The Company is committed to help the development of local communities and focuses on key developmental areas of Children, Education, Health and Sanitation, Livelihood Generation and Environment and Physical Infrastructure. The Company, along with the ‘Dalmia Bharat Group Foundation’, its corporate foundation for CSR, actively collaborates with renowned and responsible NGOs like CARE India and HOPE Foundation to implement its CSR programmes. During the year, DBEL’s CSR activities continued around its plants in Dalmiapuram, Ariyalur and Kadapa. Details of the Company’s CSR activities are carried in another section of this report.



DalmiaBharat Group Foundation



human rEsourcEs

On the employee front, talent management remains a key challenge across the cement business. The Company is committed to attract, develop and retain high quality talent to produce top quality results. The Company promotes a culture of high commitment and entrepreneurial approach across all its management positions to foster overall organisational growth.

There are well-defined processes for career development, and as a step in this direction, challenging assignments with commensurate responsibilities are given to identify employees, even at young age. The Company takes immense pride in the knowledge and intellectual capital that the professional employee force brings to the organisation. To usher development and push the motivation bar even further, the Company has introduced various special activities/schemes, including:

Employee outreach programme for sales & marketing: Through these interactions, the Human Resource Department had in-depth discussions with its team & heads to better understand their issues and problems. This is a recurring programme where sales personnel are contacted by the HR department, who, record their issues and then resolve them to their satisfaction.

raG (red, amber, Green): This R-A-G methodology was adopted to pick insights from employees across the business to gauge their feelings about their workspace and if they were planning to leave. Based upon this, employees were classified into RED (Planning to leave), AMBER (Thinking about leaving) and GREEN (Not thinking about leaving). The HR department then, along with key stakeholders, worked closely with the employees to change their status (from Red to Amber and from Amber to Green).

pldpp (performance linked deferred payment plan): To incentivise and share the Company’s success

with its employees and generate wealth for them, the Company has developed a unique programme called the Performance Linked Deferred Payment Plan.

open house session: An open house session was conducted with the sales and marketing team to identify the roadblocks in achieving their targets. A decision-making council was formed to enable the team garner desired results. This successful exercise was also carried forward to other units.

Employee happiness Bell: The Company gauges the happiness quotient and provides a medium to express happiness & satisfaction at the workplace; the Company installed a “Bell” in the Chennai office to promote the culture of happiness in the work place.

The Company is confident that all these measures will enable powerful interpersonal communication and enhance the employee satisfaction.

As on March 31, 2012, the total number of employees in the Company are 1,256.

risks & concErns

Economic uncertainty

The cement sector is prone to the uncertainty in economic environment that may impact the demand, cost of production and selling price. Indian economy did show resilience to the global economic downturn, but is presently facing challenges on many fronts. The Company regularly monitors the economic trends and tries to hedge itself from the risk of uncertainty with an astute balance between its short-term and long-term strategies.

competition

Courtesy its commodity nature and inherent cyclicality, cement



sector continues to be competitive. The rising competition may impact the revenues and profitability. The Company makes consistent investment in marketing and promotions towards keeping the distribution channel aligned as well as retaining the brand superiority in the mind of its customers. The same helps the Company perform better in the competitive markets.

regulations

Shift in Government policies – across taxes & levies, import & export, royalty on natural resource, land & environment laws, non-availability of energy & transport infrastructure – may adversely impact the cement sector.

credit & liquidity

Maintaining an adequate level of credit and liquidity is critical for Capex & Opex requirement for cement players. Though presently there are no constraints, fluid global economic situation could pose challenges.

Currency fluctuation

Indian cement sector’s exposure to currency risk arises out of importing coal for operations and machinery & equipment for expansion. High current account deficit and inflation could put pressure on the rupee. The Company hedges major transactions in foreign currency, by taking forward contracts in the currency market, as considered appropriate.

intErnal control systEms

The Company has an appropriate and adequate system of internal control to ensure that all its assets are safeguarded. The Company has established an internal audit department which ensures adequate review of the whole Company’s internal control systems through its audit partners M/s KPMG. The effectiveness of the internal controls is continuously monitored by the Corporate Audit Department. The Corporate Audit’s main focus is to provide to the Audit Committee and the Board of

Directors an independent, objective and reasonable assurance of the adequacy and effectiveness of the organisation’s risk management control & governance process. The Corporate Audit group also follows up the implementation of the remedial actions and improvement in business processes as per review by the audit committee and senior management. The audit activities are undertaken as per the annual audit plan, which is developed based on the risk profile of the business process and in consultation with outsourced firms and the statutory auditors. The audit plan is approved by the audit committee, which regularly reviews compliance to the approved plan. The audit department also does suitable enhancements to the audit plan based on the current business operating scenario.

inFormation tEchnoloGy (it) & inFormation manaGEmEnt systEm (ims)

The Company views IT as an important enabler to its business objective and leverages its advantages towards a robust IMS.

The Company successfully rolled out SAP for corporate function to manage all the corporate functions e.g. Finance, Commercial and Human Resources smoothly. The Company has also rolled SAP Project System functionality to manage Capex projects effectively. This will bring the visibility of project status with respect to schedule, budget, inventory etc.

The Company has also successfully upgraded SAP EHP to ensure business continuity and enhance the performance and scalability.

The Company launched its Intranet “SPARSH” in September 2011, which is acting as a single platform for employee engagement, collaboration & knowledge management, leading to excellence in all endeavours.

The Company launched its corporate website with the vision of “One Dalmia” along with four businesses websites which

KnowledgeIntellectual Capital

Professional employee force



enables them to communicate and market better to their stakeholders.

The Company has invested in Sales Force Automation to increase sales force productivity, which will provide better customer service, close deals and retain existing customers and also help in engaging customers more effectively than ever before. This system is expected to be available to the sales team in early FY13.

The Company has initiated implementation of an ERP Solution in Refractory business, which is expected to go live in the first half of FY13.

Successfullyrolled out SAP for corporate

function



The Directors’ have pleasure in submitting the Annual Report and Audited Statements of Account of the Company for the year ended March 31, 2012.

Financial Results(` in Crore)

FY12 FY11net sales turnover 156.79 134.56Profit before interest, depreciation and tax (EBITDA)

43.30 30.25

Less: Interest and Financial Charges 1.30 1.44Profit before depreciation and tax (PBDT)

42.00 28.81

Less: Depreciation 0.31 0.21Profit before tax (PBT) 41.69 28.60Provision for current tax 9.16 7.41Provision for deferred tax (0.28) (0.11)Prior year tax charge 0.27 -MAT credit charge/(entitlement) 0.14 (0.14)Profit after tax (PAT) 32.40 21.44Add: (i) Surplus brought forward 7.55 0.10Profit available for appropriation 39.95 21.54aPPROPRiatiOns:General Reserve 3.25 2.20Proposed Dividend 12.17 10.15Dividend Distribution tax thereon 1.97 1.64Balance carried forward 22.56 7.55

39.95 21.54

DIVIDENDYour Directors have decided to recommend a maiden final dividend amounting to `1.50 per equity share of `2/- each as against a dividend of `1.25 per equity share paid in the immediately preceding year.

OPERATIONS AND BUSINESS PERFORMANCEPlease refer to the chapter on Management Discussion and Analysis for a detailed analysis of the performance of the Company during 2011-12.

CORPORATE GOVERNANCEThe Company’s corporate governance practices have been detailed in a separate chapter and is annexed to and forms part of this Report. The Auditors certificate on the compliance of Corporate Governance Code embodied in Clause 49 of the Listing Agreement is also attached as annexure and forms part of this Report.

listinG OF sHaResThe Company’s shares are listed on the Madras Stock Exchange, National Stock Exchange and Bombay Stock

Exchange and the listing fees for the year 2012-13 has been paid.

INDUSTRIAL RELATIONSThe industrial relations during the year under review remained harmonious and cordial. The Directors wish to place on record their appreciation for the excellent cooperation received from all employees at various units of the Company.

EMPLOYEES’ PARTICULARSThe statement giving particulars of employees who were in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Rules and Notifications made thereunder, is annexed. However, in terms of the proviso (b)(iv) to Section 219(1) of the Companies Act, 1956 the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE TRANSACTIONSA statement giving details of Foreign Exchange transactions, in accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, forms a part of this report as Annexure – A. As the Company is getting its goods manufactured on job work basis, the details regarding Conservation of Energy, Technology Absorption are not applicable and are thus not furnished.

SUBSIDIARIESThe Annual Report of Dalmia Cement (Bharat) Limited is attached.

The Central Government vide Notification No. 5/12/2007 – CL III, dated February 8, 2011 has given a general exemption to all Companies in terms of Section 212(8) of the Companies Act, 1956 from attaching the Annual Reports of its Subsidiaries. Accordingly, the Directors’ Report and audited accounts of the Company’s Subsidiaries, Dalmia Power Limited, DCB Power Ventures Limited, Kanika Investment Limited, and the Subsidiaries of Dalmia Cement (Bharat) Limited, viz., Ishita Properties Limited, Shri Rangam Properties Limited, Geetee Estates Limited, D. I. Properties Limited, Hemshila Properties Limited, Arjuna Brokers & Minerals Limited, Shri Radha Krishna Brokers & Holdings Limited, Dalmia Minerals & Properties Limited, Sri Subramanya Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited, Sri Shanmugha Mines & Minerals Limited, Sri Dhandauthapani Mines and Minerals Limited, Sri Trivikrama Mines and Properties Limited,

Directors’ Report for the year ended March 31, 2012

FinancialsCorporate Governance


52 Dalmia Bharat Enterprises Limited

Sri Madhusudhana Mines and Properties Limited, Dalmia Cement Ventures Limited, Cosmos Cements Limited, Sutnga Mines Private Limited, Rajputana Properties Private Limited and Golden Hills Resort Private Limited for the year ended March 31, 2012 are not being enclosed with this Annual Report. Any Member desiring to inspect the detailed Annual Reports of any of the aforementioned subsidiaries may inspect the same at the Head Office of the Company and that of the subsidiaries concerned. In event a Member desires to obtain a copy of the Annual Report of any of the aforementioned subsidiaries, he may write to the Registered Office of the Company specifying the name of the subsidiary whose Annual Report is required. The Company shall supply a copy of such Annual Report to such Member. The Annual Report of the aforementioned Subsidiaries are available at the Company’s website www.dalmiabharatenterprises.com.

FIXED DEPOSITSThe Company has not accepted any fixed deposits from public till date.

DIRECTORSMr. V. S. Jain was co-opted as Additional Director on the Board of Directors of the Company in the Meeting held on November 7, 2011. He holds office till the conclusion of the ensuing Annual General Meeting. The Company has received a Notice from a Shareholder together with requisite deposit as required under the provisions of section 257 of the Companies Act, 1956 to the effect that he intends to propose the name of Mr. V. S. Jain for being appointed as a Director of the Company.

Mr. Asanka Rodrigo ceased as Alternate Director to act in place of Mr. Donald M. Peck on November 7, 2011.

Mr. Donald M. Peck and Mr. Bharat Anand, Directors, retire by rotation at the ensuing Annual General Meeting and are eligible for re-appointment.

Shareholdings in the Company by its Directors as at March 31, 2012, are as under:

Name of the Director No. of Shares of `2/- each held

Shri Jai H. Dalmia 16,35,010Shri Y. H. Dalmia 7,51,880Shri Gautam Dalmia 7,51,990Shri Puneet Yadu Dalmia 7,42,055

CONSOLIDATED FINANCIAL STATEMENTSIn compliance with the Accounting Standard 21 on Consolidated Financial Statements, this Annual Report also includes Consolidated Financial Statements for the financial year 2011-12.

ceO/cFO RePORt On accOuntsAs required under clause 49 of the Listing Agreement, the CEO/CFO’s Report on the Accounts is attached.

DIRECTORS RESPONSIBILITY STATEMENTIn terms of the provisions of Section 217(2AA) of the Companies Act, 1956 your Directors declare that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed and no departures have been made there from;

(b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(d) the Directors had prepared the annual accounts on a going concern basis.

AUDITORSM/s. S. S. Kothari Mehta & Co., Chartered Accountants the Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. As required under Section 224 of the Companies Act, 1956, the Company has obtained from them a certificate to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the said Section.

For and on behalf of the Board

Place : New Delhi P. K. KhaitanDated : May 18, 2012 Chairman



PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE OUTGO AND EARNINGS

A. CONSERVATION OF ENERGY(a) Energy Conservation measures taken:

Not Applicable

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

Not Applicable

(c) Impact of measures taken already and proposed vide (a) and (b) above are aimed at:

Not Applicable.

(d) Total energy consumption and consumption per unit of production as per Form “A”

Not applicable

B. TECHNOLOGY ABSORPTIONNot applicable

C. FOREIGN EXCHANGE EARNINGS AND OUTGO(a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and

services, and export plans:

(i) Refractory products were exported during the year.

(b) Total foreign exchange used and earned during the year:

(i) Used: `0.26 Crore

(ii) Earned: `3.60 Crore

Annexure – A




COMPANY’S PHILOSOPHY ON CORPORATE GOVERNANCEDBEL (Dalmia Bharat Enterprises Limited) believes in good Corporate Governance. Your Company’s corporate governance practices are driven by strong Board oversight, timely disclosures, transparent accounting policies and high levels of integrity in decision-making.

In India, corporate governance standards for listed companies are regulated by the Securities and Exchange Board of India (SEBI) through Clause 49 of the listing agreement of the Stock Exchanges. The Equity Shares of the Company were listed on January 27, 2011 on the Bombay Stock Exchange Limited, National Stock Exchange and Madras Stock Exchange.

This chapter, along with the chapters on Management Discussion and Analysis and Additional Shareholders Information, reports on DBEL’s compliance with the Clause 49.

BOARD OF DIRECTORSComposition of the BoardAs on March 31, 2012 the Company’s Board comprised nine members — two Executive Directors, four Non-executive

Report on Corporate Governance

Directors and three Independent Non-executive Directors. The Chairman of the Board of Directors is a Non-executive Director. The composition of the Board is in conformity with Clause 49 of the listing agreement, which stipulates that if the Chairman is Non-executive, and is not related to the promoters or persons occupying management positions at the Board level or at one level below the Board, one-third of the Board should be independent, or else, 50 per cent of the Board should comprise independent Directors.

Number of Board MeetingsThe Board of Directors met five times during the year on 26-5-2011, 10-8-2011, 7-11-2011, 10-2-2012, and 26-3-2012. The maximum gap between any two meetings was less than 4 months.

Directors’ Attendance Record and Directorships HeldAs mandated by the Clause 49, none of the Directors are members of more than ten Board level Committees nor are they Chairman of more than five Committees in which they are members. Table 1 gives the details of the composition of the Board, attendance and details of Committee Membership and Committee Chairmanships.

Table 1: Composition of the Board of DirectorsName of the Director

Category

Attendance Particular No. of other Directorhips and Committee Memberhips/Chairmanships

Number of Board Meetings

last AGM

Other Directorhips@

Committee Member-ships #

Committee Chairman-

ships #Held Attended

Mr. P. K. Khaitan Chairman

Non-Executive 5 4 No 14 4 1

Mr. J. H. DalmiaManaging Director

Executive 5 3 No 6 - -

Mr. Y. H. DalmiaManaging Director

Executive 5 4 No 3 1 -

Mr. N. Gopalaswamy IndependentNon-Executive

5 5 Yes 8 4 2

Mr. Donald M. Peck IndependentNon Executive

5 1 No 1 - -

Mr. Gautam Dalmia Non-Executive 5 4 No 4 1 1Mr. Puneet Yadu Dalmia Non-Executive 5 4 No 8 2 -Mr. Bharat Anand Independent

Non-Executive5 3 No - - -

Mr. V. S. Jain IndependentNon-Executive

3 3 No - - -

Mr. Asanka Rodrigo *Alternate Director

IndependentNon-Executive

3 Nil No - - -

* Ceased as alternate Director effective November 7, 2011.@ The Directorships held by the Directors do not include Directorship of foreign companies and private limited companies.# As required under Clause 49 of the Listing Agreement, the disclosure includes membership/chairmanship of audit committee and investor

grievance committee of Indian public companies (listed and unlisted)



Mr. J. H. Dalmia and Mr. Y. H. Dalmia are brothers; Mr. Gautam Dalmia is the son of Mr. J. H. Dalmia and Mr. Puneet Yadu Dalmia is the son of Mr. Y. H. Dalmia.

As mandated by the revised Clause 49, the independent Directors on DBEL’s Board are not less than 21 years in age and:

Apart from receiving Director’s remuneration, do not have any material pecuniary relationships or transactions with the Company, its promoters, its Directors, its senior management or its holding Company, its subsidiaries and associates which may affect independence of the Director.

Are not related to promoters or persons occupying management positions at the Board level or at one level below the Board.

Have not been an executive of the Company in the immediately preceding three financial years.

Are not partners or executives or were not partners or executives during the preceding three financial years of the:

• Statutory audit firm or the internal audit firm that is associated with the Company.

• Legal firm(s) and consulting firm(s) that have a material association with the Company.

Are not material suppliers, service providers or customers or lessors or lessees of the Company, which may affect independence of the Director.

Are not substantial shareholders of the Company i.e. do not own two percent or more of the block of voting shares.

Information Supplied to the BoardThe Board has complete access to all information with the Company. The agenda and papers for consideration of the Board are circulated at least three days prior to the date of the Board meeting. Adequate information is circulated as part of the agenda papers and also placed at the meeting to enable the Board to take an informed decision. Inter-alia, the following information is regularly provided to the Board as a part of the agenda papers well in advance of the Board meetings or is tabled in the course of the Board meeting.

Annual operating plans & budgets and any update thereof.

Capital budgets and any updates thereof.

Quarterly results of the Company and operating divisions and business segments.

Minutes of the meetings of the Audit Committee and other Committees of the Board.

Information on recruitment and remuneration of senior officers just below the level of Board, including the appointment or removal of Chief Financial Officer and Company Secretary.

Materially important show cause, demand, prosecution notices and penalty notices.

Fatal or serious accidents, dangerous occurrences, any material effluent or pollution problems.

Any material default in financial obligations to and by the Company, or substantial non-payment for goods sold by the Company.

Any issue, which involves possible public or product liability claims of substantial nature, including any judgement or order which, may have passed strictures on the conduct of the Company or taken an adverse view regarding another enterprise that can have negative implications on the Company.

Details of any joint venture or collaboration agreement.

Transactions that involve substantial payment towards goodwill, brand equity or intellectual property.

Significant labour problems and their proposed solutions. Any significant development in human resources / industrial relations front like signing of wage agreement, implementation of voluntary retirement scheme, etc.

Sale of material nature of investments, subsidiaries, assets, which is not in the normal course of business.

Quarterly details of foreign exchange exposures and the steps taken by management to limit the risks of adverse exchange rate movement, if material.

Non-compliance of any regulatory, statutory nature or listing requirements and shareholders service such as non-payment of dividend, delay in share transfer, etc.

The Board periodically reviews compliance reports of all laws applicable to the Company, prepared by the Company as well as steps taken by the Company to rectify instances of non-compliances.




Remuneration Paid To DirectorsThe details of remuneration paid, during the year, to the Executive Directors and the Non-Executive Directors is presented in Table 2.

Table 2: Details of remuneration paid to Directors for 2011-12 (` Lakh)

Name of the Director Category Sitting Fees

Salary and Perquisites

Retirement Benefits

Commission@ total

Mr. P. K. Khaitan Non-Executive 0.90 — — 5.00 5.90Mr. N. Gopalaswamy Independent

Non-Executive1.90 — — 5.00 6.90

Mr. Donald M. Peck IndependentNon-Executive

0.40 — — 5.00 5.40

Mr. J. H. DalmiaManaging Director

Executive — 23.86 1.30 — 25.16

Mr. Y. H. DalmiaManaging Director

Executive — 23.70 1.30 — 25.00

Mr. Gautam Dalmia Non-Executive 0.80 — — — 0.80Mr. Puneet Yadu Dalmia Non-Executive 0.80 — — — 0.80Mr. Bharat Anand Independent

Non-Executive1.20 — — 5.00 6.20

Mr. V. S. Jain IndependentNon-Executive

0.60 — — 2.00 2.60

@Commission paid on net profit only.

Retirement benefits comprise the Company’s contribution to provident fund and superannuation fund. The payment of retirement benefits is being made by the respective fund(s). In addition to the above the Company also contributes, on actuarial valuation basis, amounts to the Gratuity Fund towards gratuity of its employees including the Managing Directors. The Company has not provided any stock options to the employees at the Board level.

The appointment of Mr. Y. H. Dalmia, as Managing Director has been made for a period of five years effective February 11, 2011 and the appointment of Mr. J. H. Dalmia as Managing Director has been made for a period of five years with effect from April 1, 2011.

The Company has also paid an amount of `10.1 Lakh to M/s. Khaitan & Co., Solicitors and Advocates (a firm in which Mr. P. K. Khaitan and Mr. Bharat Anand are Partners), for the professional services rendered by them including their appearances opinions on various matters and for appearances of other Advocates/Senior Advocates engaged by them in defending legal cases on behalf of the Company.

Code of ConductDBEL’s Board has laid down a code of conduct for all Board members and designated senior management of the Company. The code of conduct is available on the website of the Company www.dalmiabharatenterprises.com. All Board members and senior management personnel have affirmed compliance with the Code of Conduct. A declaration signed by the Chief Executive Officer (CEO) to this effect is enclosed at the end of this report.

Risk ManagementDBEL has a risk management framework in place. Under this framework the management identifies and monitors business risks on a continuous basis, and initiates appropriate risk mitigation steps as and when deemed necessary. DBEL has established procedures to periodically place before the Board the risk assessment and minimisation procedures being followed by the Company and steps taken by it to mitigate those risks through a properly defined framework.

Committees of the BoardThe Company has four Board-level Committees – Audit Committee, Remuneration Committee, Investment Committee and Shareholders Grievance Committee.

All decisions pertaining to the constitution of Committees, appointment of members and fixing of terms of service for Committee members is taken by the Board of Directors. Details on the role and composition of these Committees, including the number of meetings held during the financial year and the related attendance, are provided below:

a) Audit CommitteeAs on March 31, 2012, the Audit Committee constituted of Mr. N. Gopalaswamy as the Chairman of the Committee, Mr. Donald M. Peck, Mr. Y. H. Dalmia (co-opted on May 26, 2011) and Mr. Bharat Anand as its members. The Audit Committee met four times during the period on 26-5-2011, 10-8-2011, 7-11-2011 and 10-2-2012. The details of attendance of the Directors in the Meetings of the Audit Committee are given in Table 3.



Table 3: Attendance record of DBEL’s Audit Committee during 2011-12Name of Members Category status No. of Meetings

Held Attended Mr. N. Gopalaswamy Independent Chairman 4 4Mr. Donald M. Peck Independent Member 4 1Mr. Y. H. Dalmia Executive Member 4 1Mr. Bharat Anand Independent Member 4 3

The Officer responsible for the finance function, the head of internal audit and the representative of the statutory auditors, internal auditors and cost auditors are regularly invited by the Audit Committee to its meetings. Ms. Nidhi Bisaria, Company Secretary, is the Secretary to the Committee.

All members of the Audit Committee have requisite accounting and financial management expertise. The Chairman of the Audit Committee attended the Annual General Meeting of the Company held on August 26, 2011.

The functions of the Audit Committee of the Company include the following:

Oversight of the Company’s financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible.

Recommending to the Board, the appointment, re-appointment and, if required, the replacement or removal of the statutory auditor and the fixation of audit fees.

Approval of payment to statutory auditors for any other services rendered by the statutory auditors.

Reviewing, with the management, the annual financial statements before submission to the Board for approval, with particular reference to:

• Matters required to be included in the Director’s Responsibility Statement to be included in the Board’s report in terms of clause (2AA) of section 217 of the Companies Act, 1956.

• Changes, if any, in accounting policies and practices and reasons for the same.

• Major accounting entries involving estimates based on the exercise of judgment by management.

• Significant adjustments made, if any, in the financial statements arising out of audit findings.

• Compliance with listing and other legal requirements relating to financial statements.

• Disclosure of any related party transactions.

• Qualifications, if any, in the draft audit report.

Reviewing, with the management, the quarterly financial statements before submission to the Board for approval.

Reviewing, with the management, performance of statutory and internal auditors, adequacy of the internal control systems.

Reviewing the adequacy of internal audit function, if any, including the structure of the internal audit department, staffing and seniority of the official heading the department, reporting structure coverage and frequency of internal audit.

Discussion with internal auditors on any significant findings and follow up there on.

Reviewing the findings of any internal investigations by the internal auditors into matters where there is suspected fraud or irregularity or a failure of internal control systems of a material nature and reporting the matter to the Board.

Discussion with statutory auditors before the audit commences, about the nature and scope of audit as well as post-audit discussion to ascertain any area of concern.

To look into the reasons for substantial defaults, if any, in the payment to the depositors, debenture holders, shareholders (in case of non payment of declared dividends) and creditors.

Carrying out any other function as is mentioned in the terms of reference of the Audit Committee.

The Audit Committee is empowered, pursuant to its terms of reference, to:

Investigate any activity within its terms of reference and to seek any information it requires from any employee.




Obtain legal or other independent professional advice and to secure the attendance of outsiders with relevant experience and expertise, when considered necessary.

The Company has systems and procedures in place to ensure that the Audit Committee mandatorily reviews:

Management discussion and analysis of financial condition and results of operations.

Statement of significant related party transactions (as defined by the Audit Committee), submitted by management.

Management letters / letters of internal control weaknesses issued by the statutory auditors.

Internal audit reports relating to internal control weaknesses.

The appointment, removal and terms of remuneration of the Chief Internal Auditor.

Whenever applicable, the uses/applications of funds raised through public issues, rights issues, preferential issues by major category (capital expenditure, sales and marketing, working capital, etc), as part of the quarterly declaration of financial results.

If applicable, on an annual basis, statement certified by the statutory auditors, detailing the use of

funds raised through public issues, rights issues, preferential issues for purposes other than those stated in the offer document/prospectus/notice.

The Audit Committee is also apprised on information with regard to related party transactions by being presented:

A statement in summary form of transactions with related parties in the ordinary course of business.

Details of material individual transactions with related parties which are not in the normal course of business.

Details of material individual transactions with related parties or others, which are not on an arm’s length basis along with management’s justification for the same.

b) Shareholders Grievance CommitteeAs on March 31, 2012, the Shareholders Grievance Committee comprised of Mr. Bharat Anand as its Chairman, Mr. Y. H. Dalmia and Mr. Gautam Dalmia, as its members. The terms of reference to this Committee is to look into and redress the unresolved complaints received from investors, in coordination with the Company’s Registrars and Share Transfer Agent. The Committee did not meet during the period. During the period, 39 complaints were received from investors and all of them were resolved in time to the satisfaction of the concerned investors. At the close of the year there were no cases pending in respect of share transfers. Table 4 gives the details:

Table 4: Nature of complaints received and attended to during 2011-12:Nature of Complaint Pending as on

April 1, 2011Received

during the yearAnswered

during the yearPending as on March 31, 2012

1. Transfer / Transmission / Duplicate Nil 3 3 Nil2. Non-receipt of Dividend/Interest/Redemption

WarrantsNil 14 14 Nil

3. Non-receipt of securities/electronic credits Nil 15 15 Nil4. Complaints received from: - Securities and Exchange Board of India Nil 1 1 Nil - Stock Exchanges Nil 2 2 Nil - Registrar of Companies/ Department of

Company AffairsNil Nil NIL Nil

5. Others Nil 4 4 NilTotal Nil 39 39 Nil

The name and designation of the Compliance Officer is as follows: -

Ms. Nidhi Bisaria, Company Secretary

The Board of Directors has delegated the powers of approving the transfer of shares/debentures to senior executives of the Company.



c) Remuneration CommitteeAs on March 31, 2012, the Remuneration Committee comprised of Mr. N. Gopalaswamy, Mr. P. K. Khaitan and Mr. Donald M. Peck as its members. The Committee met once during the year on March 26, 2012 and Mr. P. K. Khaitan and Mr. N. Gopalaswamy attended the meeting. The terms of reference to this Committee is to consider the payment of remuneration to persons of the Board level and one level below the Board, and consider the grant of stock options to various employees under the Employees Stock Option Plan.

d) Investment CommitteeThis Committee was formed by the Board in its meeting held on November 7, 2011 and comprises of Mr. J. H. Dalmia, Mr. Y. H. Dalmia, Mr. Gautam Dalmia, and Mr. Puneet Yadu Dalmia, as its members. The Committee was vested with the powers of making investments in securities quoted on the stock exchanges upto a total limit of `10 Crore. The Committee did not meet any time during the year.

Subsidiary CompaniesClause 49 defines a “material non-listed Indian subsidiary” as an unlisted subsidiary, incorporated in India, whose turnover or net worth (i.e. paid up capital and free reserves) exceeds 20% of the consolidated turnover or net worth respectively, of the listed holding Company and its subsidiaries in the immediately preceding accounting year.

As on March 31, 2012, under this definition, DBEL has a ‘material non-listed Indian subsidiary’, namely, Dalmia Cement (Bharat) Limited. Mr. N. Gopalaswamy, an Independent Non-executive Director has been co-opted as a member on the Board of Directors of this subsidiary.

Shares and Convertible Instruments held by Non-Executive DirectorsTable 5 gives details of the shares and convertible instruments held by the Non-Executive Directors as on March 31, 2012.

Table 5: Details of the shares and convertible instruments held by the Non-Executive Directors as on March 31, 2012Name of the Director Category Number of shares held Number of convertible

instruments heldMr. P. K. Khaitan Non-Executive Nil Nil Mr. N. Gopalaswamy Independent Non-Executive Nil NilMr. Donald M. Peck Independent Non-Executive Nil NilMr. Bharat Anand Non-Executive Nil NilMr. Gautam Dalmia Non-Executive 751990 NilMr. Puneet Yadu Dalmia Non-Executive 810055 NilMr. V. S. Jain Independent Non-Executive Nil Nil

MANAGEMENTManagement Discussion and AnalysisThe Annual Report has a detailed report on Management Discussion and Analysis.

DisclosuresRelated party transactions in the ordinary course of business have been disclosed at Note No. 38 to the financial statements in the Annual Report. No transactions were made that had the possibility of injuring the Company’s interests. The Company complied with the regulatory requirements on capital markets. No penalties/strictures have been imposed against it.

The Company has declared a maiden dividend, since its incorporation in 2006, only in 2011. As such, the question of complying with the requirements of Section 205C of the Companies Act, 1956 by remitting all amounts due to be credited to the Investor Education & Protection Fund does not arise at this point of time.

Disclosure of Accounting Treatment in Preparation of Financial StatementsDBEL has followed the guidelines of Accounting Standards laid down by the Central Government under the provisions of section 211(3) of the Companies Act, 1956 in the preparation of its financial statements.

Details of Non-Compliance by the CompanyDBEL has complied with all the requirements of regulatory authorities. No penalties/strictures were imposed on the Company by the Stock Exchanges or SEBI or any statutory authority on any matter related to capital market during the last three years.

Code for Prevention of Insider-Trading PracticesIn compliance with the SEBI regulations on prevention of insider trading, the Company has instituted a comprehensive code of conduct for its management and staff. The code lays down guidelines, which advises them on procedures to be followed and disclosures to be made, while dealing with shares of Company, and cautioning them of the consequences of violations.




CEO/ CFO certificationThe CEO and CFO certification of the financial statements for the year is enclosed at the end of the report.

SHAREHOLDERSReappointment/Appointment of DirectorsPursuant to the Articles of Association of DBEL, at every Annual General Meeting of the Company, one-third of the rotational Directors retire by rotation or if their number is not three or a multiple of three, the number nearest to one-third retire from office.

Mr. V. S. Jain was appointed as an Additional Director in the Meeting of the Board of Directors held on November 7, 2011. Accordingly, in terms of section 255 of the Companies Act, 1956 he holds office till the conclusion of the ensuing Annual General Meeting of the Company. The Company has received a Notice from a shareholder, pursuant to the provisions of section 257 of the Companies Act, 1956, to the effect that he proposes to signify the name of Mr. V. S. Jain for being appointed as a Director of the Company at the ensuing Annual General Meeting.

At the ensuing Annual General Meeting, Mr. Bharat Anand

and Mr. Donald M. Peck, Directors of the Company retire by rotation and are eligible for re-appointment.

Means of Communication with ShareholdersThe Board of Directors of the Company approves and takes on record the unaudited financial results in the format prescribed by the Stock Exchanges within 45 days of the close of every quarter and such results are published in one financial newspaper, viz., Business Standard and one Regional Newspaper, Dinamani, within the stipulated time. The Company also publishes its annual audited results in these newspapers within the period of 60 days from the close of the financial year.

As required under the Listing Agreement all the data related to quarterly and annual financial results, shareholding pattern, etc., is provided to the web-site of the Stock Exchanges within the time frame prescribed in this regard. All the details required to be forwarded to the Stock Exchanges are being sent by the Company from time to time.

General Body MeetingsTable 6 gives the details of the last three Annual General Meetings (AGMs).

Table 6: Details of last three AGMsFinancial year Date Time Location2010-11 August 26, 2011 9.00 a.m. Community Centre, Dalmiapuram, Dist. Tiruchirapalli, Tamil Nadu, 6216512009-10 August 27, 2010 2.00 p.m. Community Centre, Dalmiapuram, Dist. Tiruchirapalli, Tamil Nadu, 621651.2008-09 July 31, 2009 2.00 p.m. Community Centre, Dalmiapuram, Dist. Tiruchirapalli, Tamil Nadu, 621651.

The details of Special Resolutions in respect of the last three Annual General Meetings are given in Table 7.

Table 7: Details of Special Resolutions passed in last three Annual General MeetingsDate of Meeting Type of Meeting ParticularsAugust 26, 2011 AGM • Resolution pursuant to the provisions of sections 198, 269 and 309 of the

Companies Act, 1956, to approve the appointment and payment of minimum remuneration, in the event of loss or inadequacy of profits, of upto an amount of `48 Lakh per annum to Mr. J. H. Dalmia, Managing Director of the Company for a period of 5 years effective April 1, 2011.

• Resolution pursuant to the provisions of sections 198, 269 and 309 of the Companies Act, 1956, to approve the appointment and payment of minimum remuneration, in the event of loss or inadequacy of profits, of upto an amount of `48 Lakh per annum to Mr. Y. H. Dalmia, Managing Director of the Company for a period of 5 years effective February 11, 2011.

• To approve the payment of commission of upto 1% of the net profits of the Company to the Non-wholetime Directors of the Company in terms of section 309 of the Companies Act, 1956.

• To approve the issue of 16,00,000 Equity Shares of `2/- each in the capital of the Company under the Employee Stock Option Plan, 2011, pursuant to the provisions of section 81(1A) of the Companies Act, 1956, at a price of upto the latest available closing market price prior to the date of grant of such options.



Date of Meeting Type of Meeting ParticularsAugust 26, 2011 (contd.)

• Resolution seeking approval of shareholders pursuant to section 81(1A)(a) read with sections 292(1)(a)/ 292(1)(b)/ 292(1)(c) of the Companies Act, 1956 for issuance and allotment of further securities convertible into equity shares to the extent of `15,000 million which upon conversion of all securities would give rise to the issue of equity capital of an aggregate face value of `4 Crore.

August 27, 2009 AGM • Permitting amendment in the Articles 12 and 13 of the Articles of Association of the Company relating to issue of new certificate in marketable lots and in lieu of worn out and defaced certificates without any cost.

• Authorising issue and allotment of 80939303 equity shares of `2/- each to persons other than the existing shareholders of the Company in terms of the Scheme of Arrangement approved by the Madras High Court vide its order dated July 29, 2010 resulting in the increase in issue and paid–up capital of the Company by `16.19 Crore.

(The above resolutions were adopted unanimously)

Postal BallotDuring the year ended March 31, 2012, the shareholders have not been approached for passing of any Resolution by way of Postal Ballot.

COMPLIANCEMandatory RequirementsDBEL is fully compliant with the applicable mandatory requirements of Clause 49.

Adoption of Non-Mandatory RequirementsAllthough it is not mandatory, Remuneration Committee and Investment Committee of the Board are in place. Details of the said Committees have been provided under the head “Committees of the Board” above.

ADDITIONAL SHAREHOLDER INFORMATIONAnnual General MeetingDate: August 18, 2012Time: 11.15 a.m.Venue: Community Centre Premises,Dalmiapuram - 621651, Dist. Tiruchirapalli, Tamil Nadu

Financial CalendarFinancial year: April 1, 2012 to March 31, 2013

For the year ended March 31, 2013, results will be announced on:

First quarter: By mid-August, 2012

Second quarter: By mid-November, 2012

Third quarter: By mid-February, 2013

Fourth quarter: By end May, 2013

Book ClosureThe dates of book closure are from August 14, 2012 to August 18, 2012 inclusive of both days.

Dividend PaymentThe final dividend of `1.50 per equity share will be paid on or after August 30, 2012, subject to approval by the shareholders at the Annual General Meeting.

ListingThe Equity Shares is listed on the following Stock Exchanges:

a) The Madras Stock Exchange Association Limited,Exchange Building,Post Box No. 183,11, Second Line Beach,Chennai - 600001

b) Bombay Stock Exchange Limited,Phiroze Jeejeebhoy Towers,Dalal Street,Mumbai - 400001

c) The National Stock Exchange of India Limited,Exchange Plaza,5th Floor, Plot No. C/1, G - Block,Bandra Kurla Complex,Bandra (East),Mumbai - 400051

Stock Codes:

Bombay Stock Exchange : DALMIABHA (533309)

National Stock Exchange : DALMIABEL

ISIN (for Dematerialised Shares) : INE439L01019

The Company has not issued any debentures.




Stock Market Data

Table 1, 2, Chart A and Chart B gives details

Table 1: High, lows of Company’s shares for 2011-12 at BSE and NSEMonth BSE nse

High low close High low closeApril, 2011 198.00 160.25 177.30 194.00 175.50 177.30May, 2011 185.00 160.05 168.00 184.00 160.05 168.05June, 2011 180.25 147.20 164.35 180.30 146.05 167.70July, 2011 172.00 141.50 141.85 172.85 135.35 142.30August, 2011 158.00 114.05 127.55 156.00 111.00 127.00September, 2011 149.90 102.50 108.65 129.00 102.00 108.00October, 2011 121.95 101.15 107.00 114.60 99.25 106.75November, 2011 113.90 87.00 108.85 114.35 89.00 107.65December, 2011 130.90 104.95 117.45 125.85 104.95 119.25January, 2012 154.90 116.20 129.15 153.50 116.50 129.70February, 2012 146.00 120.35 129.95 145.95 122.00 129.35March, 2012 159.95 125.50 143.75 149.00 126.20 143.00

Table 2: Stock Performance over past 5 years% of Change in

Company's Share Sensex Nifty Company in comparison withBSE nse Sensex Nifty

FY 2011-12 -22 -23 -9 -9 -14 -132 years * N/A N/A N/A N/A N/A N/A3 years * N/A N/A N/A N/A N/A N/A5 years * N/A N/A N/A N/A N/A N/A

* Not Applicable as the Company got listed on January 27, 2011.

Chart A: DBEL’s Share Performance versus BSE Sensex

Note: Share prices and Sensex indexed to 100 as on 1st working day of the financial year 2011-12, i.e. April 1, 2011

Chart B: DBEL’s Share Performance versus NIFTY

Note: Share prices and NIFTY indexed to 100 as on 1st working day of the financial year 2011-12, i.e. April 1, 2011



Distribution of ShareholdingTable 3 and 4 lists the distribution of the shareholding of the equity shares of the Company by size and by ownership class as on March 31, 2012.

Table 3: Shareholding pattern by sizesl no. No. of Equity shares held No. of

shareholders% of shareholders No. of Shares held % of Shareholding

1 1 - 500 8906 73.1 1185520 1.462 501 - 1000 1259 10.3 959893 1.183 1001 - 2000 1002 8.2 1496046 1.844 2001 - 3000 357 2.9 901820 1.115 3001 - 4000 179 1.5 645201 0.796 4001 - 5000 100 0.8 452257 0.567 5001 - 10000 200 1.6 1376335 1.708 10001 and above 184 1.5 74172231 91.36 total 12187 100.0 81189303 100.00

Table 4: Shareholding Pattern by ownershipParticulars No. of Shareholders % of Shareholders No. of Shares held % of ShareholdingPromoters @ 19 0.2 6200820 7.6Promoters Bodies Corporate @ 27 0.2 41701178 51.4Central/State Governments 4 0.0 128155 0.2Financial Institutions 2 0.0 1601246 2.0Mutual Funds 1 0.0 2500 0.0Foreign Institutional Investors 21 0.2 9338645 11.5Insurance Companies 2 0.0 968096 1.2Bodies Corporates 322 2.6 2651176 3.3Overseas Corporate Bodies 0 0.0 0 0.0Foreign Corporate Bodies 2 0.0 4470588 5.5NRI/Foreign Nationals 120 1.0 186401 0.2Individuals/Others 11667 95.7 13940498 17.2total 12187 100.0 81189303 100.00

Note: @ The Promoters have not pledged the shares of the Company against any loan drawn by them. This disclosure may be treated as a disclosure as required under Clause 35 of the Listing Agreement and under Regulation 31 of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulation, 2011.

Dematerialisation of SharesAs on March 31, 2012, 95.91% shares of the Company were held in the dematerialised form. The Promoters of the Company hold their entire shareholding in dematerialised form.

Outstanding GDRs/ADRs/Warrants/OptionsNIL

Details of Public Funding Obtained in the last three yearsNIL

Registrar and Transfer AgentFor Equity Shares:Karvy Computershare Private Limited,Plot Nos. 17 to 24, Vittal Rao Nagar,Madhapur, HYDERABAD - 500081.

Share Transfer SystemThe share transfers in the physical form are presently

processed by the Registrars and Transfer Agents and returned within a period of 30 days. The Company’s Equity Shares are tradable in dematerialised form since the date of listing. Under the dematerialised system, the Shareholder can approach a Depository Participant (DP) for getting his shares converted from physical form to dematerialised form. The DP will generate a request for the dematerialisation, which will be sent by him to the Company’s Registrars and Share Transfer Agents. On receipt of the same the shares will be dematerialised.

Registered Office Address:Dalmia Bharat Enterprises LimitedDalmiapuram -621651,Dist. Tiruchirapalli,Tamil NaduPhone: 04329 – 235131Fax: 04329 235111

Address for CorrespondenceDalmia Bharat Enterprises LimitedShares DepartmentDalmiapuram – 621651Dist. TiruchirapalliTamil NaduPhone: 04329 - 235131Fax: 04329 235111




To THE MEMBERS,

DALMIA BHARAT ENTERPRISES LIMITED

We have reviewed the implementation of Corporate Governance procedures by Dalmia Bharat Enterprises Limited (‘the Company’) during the year ended March 31, 2012 as stipulated in clause 49 of the listing agreement of the said Company with the Stock Exchanges, with the relevant records and documents maintained by the Company, furnished to us for our review and the report on Corporate Governance as approved by the Board of Directors.

The compliance of conditions of Corporate Governance is the responsibility of the management. Our examination was limited to a review of procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions of Corporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

In our opinion and to the best of our information and according to the explanations given to us and the representations made by the directors and the management, we certify that the Company has complied with the conditions of Corporate Governance as stipulated in the above mentioned clause in listing agreement.

We further state that such compliance in neither an assurance as to the future viability of the Company nor the efficiency or effectiveness with which the management has conducted the affairs of the Company.

For S. S. Kothari Mehta & Co.Chartered Accountants

Firm Registration No. 000756N

Arun K. TulsianPlace : New Delhi PartnerDate : May 18, 2012 Membership No. 089907

Auditors’ Certificate on Corporate Governance

ToThe Board of Directors,Dalmia Bharat Enterprises LimitedRegistered Office: Dalmiapuram – 621651District TiruchirapalliTamil Nadu

Dear Sirs,

I do hereby certify that all the Members of the Board of Directors of the Company and the Senior Management Personnel have affirmed their compliance with the Code of Conduct laid down by the Board of Directors of the Company in their Meeting held on February 11, 2011.

This certificate is being given in compliance with the requirements of Clause 49 (I) (D) (ii) of the Listing Agreement entered into with the Stock Exchanges.

Place : New Delhi Y. H. DalmiaDate : May 18, 2012 Chief Executive Officer



To The Board of Directors,Dalmia Bharat Enterprises LimitedRegistered Office: Dalmiapuram – 621651District TiruchirapalliTamil Nadu

Dear Sirs,

1. We have reviewed the Balance Sheet, Profit and Loss account and all its Schedules and Notes on Accounts, as well as the Cash Flow Statements as at March 31, 2012 and certify that to the best of our knowledge and belief:

1) These Statements do not contain any materially untrue statement or omit any material fact or contain Statements that might be misleading;

2) These Statements read together present a true and fair view of the Company’s Affairs and are in compliance with existing Accounting Standards, applicable laws and regulations.

2. We further certify that, to the best of our knowledge and belief, no transactions have been entered into by the Company during the year which are fraudulent, illegal or violative of the Company’s Code of Conduct;

3. We accept responsibility for establishing and maintaining internal controls and that we have evaluated the effectiveness of the internal control systems of the Company and we have disclosed to the Auditors and the Audit Committee, deficiencies in the design or operation of internal controls, if any, of which we are aware and the steps we have taken or propose to take to rectify these deficiencies;

4. We have indicated to the Auditors and the Audit Committee:

(i) Significant changes in internal control during the year;

(ii) Significant changes in accounting policies during the year and that the same have been disclosed in the notes to the financial statements; and

(iii) Instances of significant fraud of which we have become aware and the involvement therein, if any, of the management or an employee having a significant role in the Company’s internal control systems.

Dated: May 18, 2012 Vipin Agarwal Y. H. DalmiaPlace: New Delhi Chief Financial Officer Chief Executive Officer




STANDALONEFinancial



Auditors’ Report

to The Members of Dalmia Bharat Enterprises Limited1. We have audited the attached Balance Sheet of Dalmia

Bharat Enterprises Limited (‘the Company’) as at March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor’s Report) Order, 2003 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956 and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

iv. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report are in agreement with the books of account;

v. On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read with the Accounting Policies and Notes thereon, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) in the case of Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

b) in the case of Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of Cash Flow statement, of the cash flows for the year ended on that date.



Arun K. TulsianPlace: New Delhi PartnerDate : May 18, 2012 Membership No. 089907



Re: Dalmia Bharat Enterprises Limited (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have been physically verified by the management during the year in accordance with a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification as compared to book records.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The management has conducted physical verification of inventory at reasonable intervals during the year, except stocks lying with third parties and in transit which have been verified with reference to correspondence of third parties or subsequent receipt of goods. In our opinion, the frequency of such verification is reasonable.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to book records were not material and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has not taken any loans, secured or unsecured, from companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(e) The Company has granted unsecured loan to a Company which is covered under the register maintained under section 301 of the Companies Act, 1956. Apart from this loan, the Company has not granted any other loans, secured or unsecured, to

companies, firms or other parties listed in the register maintained under section 301 of the Companies Act, 1956. The maximum balance outstanding during the year was `150 Crore, the year end balance of such loan is `50 Crore.

(f) In our opinion, the rate of interest and other terms & conditions of such loan are not, prima facie, prejudicial to the interest of the Company.

(g) In respect of the aforesaid loans, the Company was regular in payment of interest. We are explained that this loan is repayable on demand and, therefore, there are no overdue amounts at the year end.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods and services. During the course of our audit carried out in accordance with the generally accepted auditing practices in India, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of ` Five Lakh in respect of each party have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) The Company has not accepted any fixed deposits from public to which the provisions of Section 58A and Section 58AA or any other relevant provisions of the Companies Act, 1956 including the Rules framed there under apply.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

Annexure referred to in paragraph 3 of our report of even date



(viii) The Central Government has not prescribed Rules for the maintenance of cost records under clause (d) of sub-section (1) of section 209 of the Companies Act, 1956 for any of the Company’s activities.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employee’s state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess have generally been regularly deposited during the year with the appropriate authorities.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employee’s state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other such undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c ) According to the information and explanations given to us and as per the books and records examined by us, there are no dues in respect of income tax, custom duty, wealth tax, excise duty, sales tax, service tax and cess which have not been deposited on account of any dispute.

(x) The Company has no accumulated losses as at the end of the financial year and has not incurred cash losses in the current financial year and in the immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions, banks or debenture holders.

(xii) According to the information and explanations given to us and based on the documents and records produced to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) The Company has not given any guarantees against loans taken by others from banks & financial institutions.

(xvi) In our opinion and on the basis of information and explanations given to us, the Company has not r a i sed any term loan during the financial year, hence the related reporting requirement of the Order are not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures during the year nor are there any debentures outstanding at the end of the year.

(xx) During the period covered by our audit report, the Company has not raised any money by way of public issue.

(xxi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and as per the information and explanations given by the management, we report that no fraud on or by the Company has been noticed or reported during the year.



Arun K. TulsianPlace: New Delhi PartnerDate : May 18, 2012 Membership No. 089907



Balance Sheet as at March 31, 2012

(` in Crore)notes as at

March 31, 2012as at

March 31, 2011EQUITY & LIABILITIESShareholders' FundsShare Capital 2 16.24 16.24 Reserves and Surplus 3 497.70 479.44

513.94 495.68 Non-Current LiabilitiesLong-Term Provisions 4 3.60 0.73

Deferred Tax Liability (Net) 5 0.18 0.46 Current Liabilities Short-Term Borrowings 6 4.20 0.32 Trade Payables 7 21.21 12.29 Other Current Liabilities 8 12.36 7.77 Short-Term Provisions 9 16.23 11.94

54.00 32.32 total 571.72 529.19 assetsnon-current assetsFixed Assets 10Tangible Assets 7.40 7.45 Intangible Assets 0.14 0.30

7.54 7.75 Non-Current Investments 11 279.74 230.52 Long-Term Loans and Advances 12 56.71 14.67 current assetsCurrent Investments 13 70.82 107.09 Inventories 14 32.27 30.70 Trade Receivables 15 13.21 10.37 Cash and Cash Equivalents 16 15.92 58.27 Short-Term Loans and Advances 17 95.51 69.82

227.73 276.25 total 571.72 529.19 Significant Accounting Policies 1

The accompanying notes are an integral part of the financial statements.

As per our report of even date

For S. S. Kothari Metha & Co. For and on behalf of Board of DirectorsChartered Accountants of Dalmia Bharat Enterprises LimitedFirm Registration No. 000756N

per Arun K. Tulsian Nidhi Bisaria Vipin Agarwal Puneet Yadu Dalmia Y. H. DalmiaPartner Company Secretary Executive Director Director Managing DirectorMembership No. 089907 (Finance)

Place : New DelhiDate : May 18, 2012








Statement of Profit and Loss for the year ended March 31, 2012

(` in Crore)notes For the year ended

March 31, 2012For the year ended

March 31, 2011IncomeRevenue from operations (Gross) 18 156.79 134.56 Less: Excise Duty – – Revenue from operations (Net) 156.79 134.56 Other income 19 24.57 13.43 total 181.36 147.99 ExpensesConsumption of Raw materials 20 45.36 38.26 Purchase of traded goods 2.85 0.44 (Increase)/ Decrease in inventories of finished goods, work in progress and traded goods

21 (2.89) (1.98)

Employee benefit expenses 22 39.50 30.57 Other Expenses 23 53.24 50.45 Finance Costs 24 0.31 0.21 Depreciation and amortisation expenses 10 1.30 1.44 total 139.67 119.39 Profit before tax 41.69 28.60

Provision for taxationCurrent tax 9.16 7.41 MAT Credit (Entitlement) / Charge 0.14 9.30 (0.14) 7.27 Deferred Tax (0.28) (0.11)Prior year tax charge 0.27 –Total Tax Expenses 9.29 7.16 Profit after Tax 32.40 21.44 Earning per Share 25

Basic and Diluted Earnings Per Share (In `) 3.99 2.64 [Nominal Value of Share `2 (`2) each]

Significant Accounting Policies 1



note 1 Significant Accounting Policies

notes to Financial statementsfor the year ended March 31, 2012

A. Basis of preparationThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention.

The accounting policies adopted in the preparation of financial statements are consistent with those of previous year.

B. Presentation and disclosure of financial statementsDuring the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

C. Use of estimatesThe preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

D. Tangible fixed assetsFixed assets are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable

cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.

Subsequent expenditure related to an item of fixed asset is added to its book value only if it increases the future benefits from the existing asset beyond its previously assessed standard of performance. All other expenses on existing fixed assets, including day-to-day repair and maintenance expenditure and cost of replacing parts, are charged to the statement of Profit and Loss for the period during which such expenses are incurred.

Gains or losses arising from derecognition of fixed assets are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of Profit and Loss when the asset is derecognised.

E. Depreciation on tangible fixed assetsDepreciation on fixed assets is calculated using the rates arrived at based on the useful lives estimated by the management, or those prescribed under Schedule XIV to the Companies Act, 1956, whichever is higher.

F. Intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

Intangible assets are amortised on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the effect that useful life of an intangible asset exceeds ten years, the company amortises the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amortisation period and the amortisation method are reviewed at least at each financial year end. If the



notes to Financial statementsfor the year ended March 31, 2012 (contd.)

expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of Profit and Loss when the asset is derecognised.

A summary of amortisation policies applied to the Company’s intangible assets is as below:

Rates (SLM) Computer software 20% to 33.33%

G. leases Where the Company is lesseeFinance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the statement of Profit and Loss. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, the capitalised asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of Profit and Loss on a straight-line basis over the lease

term.

H. Borrowing costsBorrowing cost includes interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the respective asset. All other borrowing costs are expensed in the period they occur.

I. Impairment of tangible and intangible assetsThe Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses, including impairment on inventories, are recognised in the statement of Profit and Loss.




J. investmentsInvestments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.

On initial recognition, all investments are measured at cost. The cost comprises purchase price and directly attributable acquisition charges such as brokerage, fees and duties.

Current investments are carried in the financial statements at lower of cost and fair value determined for each category separately. Long-term investments are carried at cost. However, provision for diminution in value is made to recognise a decline other than temporary in the value of the investments.

On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of Profit and Loss.

K. InventoriesRaw materials, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials and stores and spares is determined on a weighted average basis.

Work-in-progress and finished goods are valued at lower of cost and net realisable value. Cost includes direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity. Cost of finished goods includes excise duty and is determined on a weighted average basis.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

L. Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goodsRevenue from sale of goods is recognised when all the

significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

interestInterest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of Profit and Loss.

DividendsDividend income is recognised when the Company’s right to receive dividend is established by the reporting date.

Insurance ClaimClaims lodged with the insurance companies are accounted on accrual basis to the extent these are measurable and ultimate collection is reasonably certain.

M. Foreign currency translation

Foreign currency transactions and balances

Initial recognitionForeign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ConversionForeign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange differencesAll other exchange differences are recognised as income or as expenses in the period in which they arise.

Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liability




The premium or discount arising at the inception of forward exchange contract is amortised and recognised as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as expense for the period.

N. Retirement and other employee benefitsRetirement benefit in the form of provident fund contribution to Statutory Provident Fund, pension fund, superannuation fund and ESI are defined contribution schemes. The contributions are charged to the statement of Profit and Loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.

The Company operates two defined benefit plans for its employees, viz., gratuity and provident fund contribution to Dalmia Cement Provident Fund Trust. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognised in full in the period in which they occur in the statement of Profit and Loss.

Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of Profit and Loss and are not deferred.

O. Income taxesTax expense comprises of current and deferred. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantially

enacted, at the reporting date.

Deferred income tax reflects the impact of timing differences between taxable income and accounting income originating during the current year and reversal of timing differences of earlier years. Deferred tax is measured using the tax rates and the tax laws enacted or substantively enacted at the reporting date.

Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each reporting date the Company re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of Profit and Loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT



credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of Profit and Loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

P. Segment reportingIdentification of segmentsThe Company’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.

Inter-segment transfersThe Company generally accounts for intersegment sales and transfers at cost plus appropriate margins.

Allocation of common costsCommon allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.

Unallocated itemsUnallocated items include general corporate income and expense items which are not allocated to any business segment.

Segment accounting policiesThe Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

Q. Earnings Per ShareBasic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such

as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.

For the purpose of calculating diluted earnings per share, the net profit or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period are adjusted for the effects of all dilutive potential equity shares.

R. ProvisionsA Provision is recognised when the Company has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

The expense relating to any provision is presented in the statement of Profit and Loss net of any reimbursement.

S. Contingent liabilitiesA contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

T. Cash and cash equivalentsCash and Cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

U. Measurement of EBITDAAs permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the statement of Profit and Loss. The Company measures EBITDA on the basis of Profit/ (Loss) from continuing operations. In its measurement, the Company does not include depreciation and amortisation expense, finance costs and tax expense.




2. Share Capital(` in Crore)

as at March 31, 2012

as atMarch 31, 2011

Authorised :10,00,00,000 (10,00,00,000) Equity Shares of `2/– each 20.00 20.00

20.00 20.00 Issued, Subscribed and Fully Paid Up :8,11,89,303 (8,11,89,303) Equity Shares of `2/– each 16.24 16.24

16.24 16.24

a. Reconciliation of Equity Shares outstanding at the beginning and at the end of the reporting periodMarch 31, 2012 March 31, 2011

No. of Shares (` in Crore) No. of Shares (` in Crore)At the beginning of the period 81,189,303 16.24 250,000 0.50 Issued during the period – – 80,939,303 15.74 At the end of the period 81,189,303 16.24 81,189,303 16.24

b. Terms/ rights attached to Equity shares The Company has only one class of equity shares having a face value of `2 per share. Each equity shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.

During the year ended March 31, 2012, the amount of dividend per share recognised as distribution to equity shareholders was `1.50 (`1.25).

In the event of winding–up of the Company, the equity shareholders shall be entitled to be repaid remaining assets of the Company in the ratio of the amount of capital paid up on such equity shares.

c. Aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately preceding the Balance Sheet date

March 31, 2012 March 31, 2011No. of Shares No. of Shares

Shares issued pursuant to Scheme of Arrangement between the Company and Dalmia Cement (Bharat) Limited (formerly Avnija Properties Limited), DCB Power Ventures Limited, Dalmia Bharat Sugar and Industries Limited (formerly Dalmia Cement (Bharat) Limited) without payments being received in cash.

– 80,939,303

d. Details of shareholders holding more than 5% shares in the company No. of

Shares% holding No. of

Shares% holding

Mayuka Investment Limited 17,736,537 21.85% 17,736,537 21.85%Shree Nirman Limited 6,540,130 8.06% 6,540,130 8.06%Sita Investment Company Limited 5,876,800 7.24% 5,876,800 7.24%Ankita Pratisthan Limited 5,829,070 7.18% 5,829,070 7.18%




3. Reserves and Surplus (` in Crore)

March 31, 2012 March 31, 2011Business Restructuring ReserveOpening Balance as per last financial statements 469.69 – Add: Additions pursuant to Scheme of Arrangement – 469.69 Closing Balance 469.69 469.69

General ReserveOpening Balance as per last financial statements 2.20 – Add: Amount transferred from surplus balance in the statement of Profit and Loss 3.25 2.20 Closing Balance 5.45 2.20

Surplus in the Statement of Profit and LossBalance as per last financial statements 7.55 0.10 Profit for the year 32.40 21.44

39.95 21.54 Less: Appropriations

Transfer to General Reserve 3.25 2.20 Proposed Dividend 12.17 10.15 Dividend distribution tax 1.97 1.64 Total Appropriations 17.39 13.99

Net Surplus in the Statement of Profit and Loss 22.56 7.55 Total Reserves and Surplus 497.70 479.44

4. Long Term Provisions (` in Crore)


as atMarch 31, 2011

Provision for employee benefits 3.60 0.73 3.60 0.73

5. Deferred Tax (` in Crore)


as atMarch 31, 2011

Deferred Tax assets/ liabilities are attributable to the following items :LiabilitiesDepreciation 0.42 0.46

0.42 0.46assetsExpenses allowable for tax purposes when paid 0.19 – Others 0.05 –

0.24 – net 0.18 0.46




6. Short Term Borrowings(` in Crore)


as atMarch 31, 2011

Secured Working capital loan from Banks 4.20 0.32

4.20 0.32

Working capital loans are secured by hypothecation of inventories and other assets in favour of the participating banks ranking pari–passu on inter–se basis, repayable in next one year and carry interest rate @ 11.75%

7. Trade Payables (` in Crore)


as atMarch 31, 2011

Trade payables (Refer Note 30 of notes to financial statements)– Micro and Small Enterprises – – – Others 21.21 12.29

21.21 12.29

8. Other current liabilities(` in Crore)


as atMarch 31, 2011

Interest accrued but not due 0.01 0.02 Advances from customers 2.13 2.09 Security deposit received 0.04 0.09 Director’s Commission payable 0.22 0.10 Unclaimed Dividend* 0.21 – Other liabilities– Statutory dues 1.20 1.73 – Others 8.55 3.74

12.36 7.77

* Not due for deposit in Investor Education & Protection Fund

9. Short term Provisions(` in Crore)


as atMarch 31, 2011

Provision for Employee benefits 2.09 0.15 Proposed Dividend on equity shares 12.17 10.15 Dividend Distribution tax 1.97 1.64

16.23 11.94




10. Fixed Assets(` in Crore)

Tangible IntangibleLand Land

(Leasehold)Building Plant and

equipmentFurniture

and Fixtures

Vehicles Office equipment

total Computer Software

Grand total

costas at April 1, 2010 – – – – – – – – – –Addition pursuant to Scheme of Arrangement

0.09 1.74 6.90 2.01 1.99 2.99 3.63 19.35 0.17 19.52

Additions during the year – – – 0.07 0.04 0.27 0.16 0.54 0.27 0.81Deductions during the year

– – – 0.03 0.02 1.89 0.06 2.00 – 2.00

as at March 31, 2011 0.09 1.74 6.90 2.05 2.01 1.37 3.73 17.89 0.44 18.33Additions – – – 0.01 0.08 0.33 0.73 1.15 – 1.15Disposals – – – 0.01 0.01 – 0.04 0.06 – 0.06as at March 31, 2012 0.09 1.74 6.90 2.05 2.08 1.70 4.42 18.98 0.44 19.42Depreciationas at April 1,2010 – – – – – – – – – –Addition pursuant to Scheme of Arrangement

– 1.10 3.19 1.08 1.11 0.41 2.22 9.11 0.03 9.14

Charge for the year – 0.06 0.19 0.14 0.16 0.33 0.45 1.33 0.11 1.44as at March 31, 2011 – 1.16 3.38 1.22 1.27 0.74 2.67 10.44 0.14 10.58Charge for the year – 0.05 0.17 0.12 0.14 0.18 0.48 1.14 0.16 1.30as at March 31, 2012 – 1.21 3.55 1.34 1.41 0.92 3.15 11.58 0.30 11.88Net Blockas at March 31, 2011 0.09 0.58 3.52 0.83 0.74 0.63 1.06 7.45 0.30 7.75as at March 31, 2012 0.09 0.53 3.35 0.71 0.67 0.78 1.27 7.40 0.14 7.54

11. Non–current investments (` in Crore)


as atMarch 31, 2011

TradeA. Equity Shares Unquoted 25 (25) Shares of `10/– each fully paid up in Assam Bengal Cement Company Limited (under liquidation)

((144)) ((144))

Investments in Subsidiaries Equity Shares Unquoted 21,50,00,000 (21,50,00,000) Shares of `10/– each fully paid up in Dalmia Cement (Bharat) Limited

215.64 215.64

4,20,000 (4,20,000) Shares of `10/– each fully paid up in Kanika Investment Limited

2.32 2.32

5,00,000 (5,00,000) Shares of `10/– each fully paid up in Dalmia Power Limited

0.50 218.46 0.50 218.46

Investment in Companies other than Subsidiaries, Non–Trade Equity Shares (Unquoted) 20 (20) Shares of ̀ 10/– each fully paid up in Asian Refractories Limited (under liquidation)

((200)) ((200))

49,290 (49,290) Shares of `10/– each fully paid up in Dalmia Electrodyne Technologies (P) Limited.

1.75 1.75

250 (250) Shares of `10/– each fully paid up in Haryana Financial Corporation

((2500)) ((2500))

1.75 1.75 Less: Provision for diminution in value of Investments 1.75 – 1.75 –




(` in Crore)as at

March 31, 2012as at

March 31, 2011B. Venture Capital Fund (Unquoted) 1,188 (1,188) Units of `91,500/– (`1,00,000) each fully paid up in Urban Infrastructure Opportunities Fund

11.03 12.06

C. Units of Mutual Funds Debt Based schemes 50.00 –D. Tax free Bonds 0.25 – total 279.74 230.52 Quoted (including mutual funds): Book Value 50.25 – Market Value 50.48 – Book Value of Unquoted Investments 229.49 230.52 Aggregate Provision for diminution in value of Investments 1.75 1.75

12. Long term Loans and Advances (Considered good and unsecured unless otherwise stated)(` in Crore)


as atMarch 31, 2011

Capital advances 2.00 2.00Loans and advances– Employees@ 1.14 0.06– Related parties 7.26 6.67– Others 40.00 –Security deposit made– Related parties 1.25 1.25– Others 0.53 1.78 0.50 1.75Advances recoverable in cash or in kind or for value to be receivedAdvance Income Tax (Net of provision for Tax `9.16 Cr. (`7.25 Cr.))

4.53 4.05

MAT Credit entitlement – 0.1456.71 14.67

@ Due from officers 1.01 0.05

13. current investments (` in Crore)


as atMarch 31, 2011

Units of Mutual Funds (Quoted)Debt based schemes 61.67 91.64Equity SharesQuoted5,20,400 (5,20,400) Shares of `1/– each fully paid up in Madras Cements Limited. 10.13 10.13Nil (2,99,087) Shares of `2/– each fully paid up in Balkrishna Industries Limited. – 4.09Nil (1,00,000) Shares of `10/– each fully paid up in Cords Cable Industries Limited. – 1.35Nil (10,000) Shares of `2/– each fully paid up in Essel Propack Limited. – 0.06Nil (20,000) Shares of `10/– each fully paid up in Gitanjali Gems Limited . – 0.59




(` in Crore)as at

March 31, 2012as at

March 31, 2011Nil (18,993) Shares of `2/– each fully paid up in JB Chemicals & Pharmaceuticals Limited – 0.1550,000 (50,000) Shares of `10/– each fully paid up in Poddar Pigments Limited. 0.21 0.21Nil (3,75,000)Shares of `10/– each fully paid up in Polyplex Corporation Limited – 2.4512,900 (12,900) Shares of `10/– each fully paid up in Reliance Industries Limited 1.57 1.57Nil (1,98,000) Shares of `10/– each fully paid up in Sunshield Chemicals Limited – 0.56Nil (24,630) Shares of `10/– each fully paid up in TCPL Packaging’s Limited – 0.18Nil (10,000) Shares of `5/– each fully paid up in Wockhardt Limited – 0.39

11.91 21.73Less: Provision for diminution in value of investments 2.76 9.15 6.28 15.45total 70.82 107.09Quoted (including Mutual Funds):Book Value 70.82 107.09Market Value 70.93 113.00Aggregate Provision for diminution in value of Investments 2.76 6.28

14. Inventories(` in Crore)


as atMarch 31, 2011

Raw MaterialsOn hand 14.49 17.93In transit 1.65 0.28Work in Progress 0.83 0.35Finished Goods 13.59 11.18Stores, Spares etcOn hand 1.71 0.96

32.27 30.70

15. Trade Receivables(` in Crore)


as atMarch 31, 2011

a) Receivables outstanding for a period exceeding six months from the date they are due for payment Considered good Unsecured 0.86 1.00

0.86 1.00 b) Other receivables Considered good Unsecured 12.35 9.37

13.21 10.37




16. Cash and cash equivalents (` in Crore)


as atMarch 31, 2011

Cash on hand 0.04 0.04 Balances with Banks : – On current accounts 15.67 58.23 – Un paid Dividend account 0.21 –

15.92 58.27

17. Short term Loans and Advances (Considered good and unsecured unless otherwise stated)(` in Crore)


as atMarch 31, 2011

Loans Employees @ 0.77 0.14 Related parties 50.00 25.00 Others 40.00 – Prepaid Expenses 0.49 0.44 Interest Receivable 2.99 1.53 Advances recoverable in cash or in kind or for value to be received Related parties 0.15 41.05 Others 1.11 1.66

95.51 69.82

@ Due from officers 0.68 0.11

18. Revenue from Operations(` in Crore)

For the year ended March 31, 2012

For the year endedMarch 31, 2011

Sale of Refractory goods 76.24 67.76 Management services 69.86 56.80 Brand Fee 10.50 10.00 Other Operating Revenue 0.19 –

156.79 134.56

19. Other Income(` in Crore)



Dividendfrom current Investments 0.56 0.55 Interest Income on Bank deposits and others 7.76 3.49 Profit on sale of Investments 15.85 101.63 (including provision for diminution in value of investment written Back)Less: Loss on sale of Investments – 15.85 93.02 8.61 (including provision for diminution in value of investments)Exchange Fluctuation 0.05 0.13 Miscellaneous Receipts 0.35 0.65

24.57 13.43




20. Consumption of Raw Materials(` in Crore)



Bauxite 30.25 27.53 Others 15.11 10.73 total 45.36 38.26

21. (Increase)/ Decrease in inventories of finished goods, work in progress and traded goods(` in Crore)



Finished Goods (Refractory) – Closing stock 13.59 11.18 – Opening stock 11.18 – – – Addition pursuant to Scheme of Arrangement – 8.60 8.60

(2.41) (2.58)Work–in–Progress – Closing stock 0.83 0.35 – Opening stock 0.35 – – Addition pursuant to Scheme of Arrangement – 0.95 0.95

(0.48) 0.60

(Increase) / Decrease (2.89) (1.98)

22. Employee Benefit expenses (` in Crore)



Salaries, Wages and Bonus 35.73 25.27 Contribution to Provident Fund and Other Funds 2.03 3.91 Workmen and Staff Welfare expenses 1.74 1.39

39.50 30.57

23. Other Expenses(` in Crore)



Power and Fuel 3.95 4.80 Processing charges 22.81 19.64 Repairs and Maintenance : – Buildings – 0.68 Rent 1.89 1.85 Freight Charges 0.85 1.00 Charity and Donation 0.01 2.35 Professional Charges 6.12 4.74 Insurance 0.44 0.34 Rates and Taxes 0.31 0.21 Travelling Expenses 5.33 3.39 Computer Expenses 1.65 1.38 Miscellaneous Expenses 9.88 10.07

53.24 50.45




24. Finance Costs(` in Crore)



Interest on borrowing from banks 0.04 0.03 Other borrowing cost 0.27 0.18

0.31 0.21

25. Earning Per Share For the year ended


March 31, 2011Net Profit for calculation of Basic and Diluted EPS (` Cr.) 32.40 21.44 Total number of equity shares outstanding at the end of the year

81,189,303 81,189,303

Weighted average number of equity shares in calculating Basic and Diluted EPS

81,189,303 81,189,303

Basic and Diluted EPS (`) 3.99 2.64

26. Contingent liabilities (not provided for) in respect of:(` in Crore)

s. no. Particulars 2011–12 2010–11a) Claims against the Company not acknowledged as debts 0.45 0.45

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors etc, the Company believes that there is a fair chance of favourable decisions in respect of the items listed above and hence no provision is considered necessary against the same.

27. Capital and other commitment(` in Crore)

Particulars 2011–12 2010–11Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 0.27 0.38Estimated amount of contracts remaining to be executed on other than capital account and not provided for (net of advances) – –

28. Remuneration paid to auditors (included in Miscellaneous Expenses):(` in Crore)

Particulars 2011–12 2010–11Statutory auditorsi) Audit Fee 0.02 0.02ii) Other services 0.02 0.01iii) For Expenses – 0.02

29. In the opinion of the Board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.




30. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006 to the extent of information available with the Company.

(` in Crore)Particulars 2011–12 2010–11The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year

– –

The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprise Development Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

– –

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.

– –

The amount of interest accrued and remaining unpaid at the end of each accounting year; and

– –

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

– –

total – –

31. Particulars of forward contracts outstanding as at the Balance Sheet date:Forward contract outstanding as at Balance Sheet date:Particulars Currency Amount in

Foreign Currencyamount

(` in Crore)Purpose

Buy USD 1,533,534 7.82 To hedge the import creditors for Raw Material.

(1,399,489) (6.53)total USD 1,533,534 7.82

(1,399,489) (6.53)

Particulars of unhedged foreign currency exposure:Particulars Currency Amount in

Foreign Currencyamount

(` in Crore) Purchase of Raw Materials USD 1,331,081 6.79

(–) (–)total USD 1,331,081 6.79

(–) (–)

Additional information pursuant to the provisions of Part II of revised schedule VI to the Companies Act, 1956:

32. CIF Value of Imports(` in Crore)

Particulars 2011–12 2010–11Raw Material 20.99 13.69

33. Expenditure in foreign currency (Accrual basis):(` in Crore)

Particulars 2011–12 2010–11Professional Fees, Consultant Fee and Interest – 0.33Others 0.26 0.29total 0.26 0.62




34. Earnings in foreign currency (Accrual basis):(` in Crore)

Particulars 2011–12 2010–11Export of goods at FOB value 3.60 2.42total 3.60 2.42

35. Details regarding imported and indigenous materials consumed during the year:Imported Indigenous Value of total

consumptionValue

(` in Crore)Percentage to

total consumptionValue

(` in Crore)Percentage to

total consumption(` in Crore)

Raw Materials 27.09 59.73 18.27 40.27 45.36(16.39) (42.83) (21.87) (57.17) (38.26)

36. Gratuity and Other Post Employment Benefit PlansGratuityThe Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with an insurance company in the form of a qualifying insurance policy.

The Company contributes provident fund liability to Dalmia Cement Provident Fund Trust. As per the Guidance Note on implementing AS 15, Employee Benefit (Revised 2005) issued by the Accounting Standards Board (ASB), provident funds set up by the employers, which require interest shortfall to be met by the employer, need to be treated as defined benefit plan.

During the current financial year, actuarial valuation for Provident Fund for the financial year 2011–12 was carried out in accordance with the Guidance Note issued by the Actuarial Society of India, and accordingly, the Company has provided shortfall in provident fund liability in the books. No actuarial valuation was carried out in the last year pending issuance of guidance note in this regard. Further, there was no shortfall in the provident fund liability ascertained by the Company in the last year. In view of this, comparative figures for last year have not been given.

The following tables summarise the components of net benefit expense recognised in the statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the plan.

Statement of Profit and LossNet employee benefit expense (recognised in Employee benefit)

(` in Crore)Particulars Gratuity (Funded) PF Trust (Funded)

2011–12 2010–11 2011–12Current Service Cost 0.46 0.33 0.55Interest Cost 0.16 – –Expected return on plan assets (0.22) – –Net Actuarial (Gain)/ Loss 0.06 (0.01) –Total Expense 0.46 0.32 0.55Actual return on plan assets 0.22 0.15 –




Balance Sheet(` in Crore)

Particulars Gratuity (Funded) PF Trust (Funded)2011–12 2010–11 2011–12

Present value of obligation as at year–end 2.59 2.02 7.46Fair value of plan assets as at year–end 2.50 2.35 7.42Funded status {( Surplus/(Deficit)} (0.09) 0.33 (0.04)Net Asset/(Liability) as at year end (0.09) 0.33 (0.04)

Changes in the present value of the defined benefit obligation are as follows:(` in Crore)


Opening defined benefit obligation 2.02 – 7.85Acquisition adjustments – 1.55 –Interest Cost 0.16 – 0.67Contribution by plan participation / employees – – 0.19Current service cost 0.46 0.33 0.55Actuarial (Gains)/ Losses on obligation 0.05 0.14 (0.25)Benefit paid (0.10) – (2.05)Settlements/Transfer in – – 0.50Closing defined benefit obligation 2.59 2.02 7.46

Changes in the fair value of plan assets are as follows:(` in Crore)


Opening fair value of plan assets 2.35 – 7.67Acquisition adjustments – 1.55 –Expected return on plan assets 0.22 – 0.65Contribution by employer 0.03 0.65 0.55Contribution by plan participant / employee – – 0.19Benefit paid (0.10) – (2.05)Settlements / Transfer in – – 0.50Actuarial Gains/ (Losses) on plan assets – 0.15 (0.09)Closing fair value of plan assets 2.50 2.35 7.42

The Company expects to contribute `0.35 (`0.45 Cr.) to gratuity in 2012–13.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:Particulars Gratuity (Funded) PF Trust (Funded)

2011–12 2010–11 2011–12Qualifying Insurance Policy 100% 100% –Govt. securities and financial securities as defined under Income Tax rules

– – 100%

The overall expected rate of return on assets is determined based on the market prices prevailing on that date, applicable to the period over which the obligation is to be settled.




The principal assumptions used in determining gratuity for the Company’s plans are shown below:Particulars Gratuity (Funded) PF Trust (Funded)

2011–12 2010–11 2011–12Discount Rate 8.00% 8.00% 8.00%Expected rate of return on assets 9.25% 9.15% –Mortality Table LIC (1994–96) LIC (1994–96) LIC (1994–96)Salary Escalation 7.00% 7.00% –

The estimates of future salary increases, considered in actuarial valuation, takes into account inflation, seniority, promotion and other relevant factors, such as supply and demand in the employment market.

Amounts for the current and previous year in respect of gratuity are as follows: (` in Crore)


Defined benefit obligation 2.59 2.02 7.46Plan assets 2.50 2.35 7.42Surplus/ (Deficit) (0.09) 0.33 (0.04)Experience adjustment on plan asset (Loss) / Gain – 0.15 –Experience adjustment on plan liabilities (Loss) / Gain (0.05) (0.14) –

As AS–15 is applicable from the previous financial year, the above disclosure as required under para 120(n) has been made prospectively from the date it became applicable on the Company.

Provident and other funds Contribution to Defined Contribution Plans:

(` in Crore)Particulars 2011–12 2010–11Provided Fund / Pension Fund/Superannuation funds 1.42 1.37

37. The Company’s operating business are organised and managed separately according to the nature of products manufactured and services provided. The two identified reportable segments are Refractory, Management services. As the export turnover is insignificant in comparison to total turnover, there are no reportable geographical segments.




Segment Information The following table presents segment revenues, results, assets & liabilities in accordance with AS–17:

(` in Crore)Particulars Segment Refractory Management

ServicesOthers total

Revenue Gross Revenue 76.43 81.79 – 158.22

(67.76) (66.80) (–) (134.56)Less: Inter Segment Revenue – 1.43 – 1.43

(–) (–) (–) (–)net Revenue 76.43 80.36 – 156.79

(67.76) (66.80) (–) (134.56)ResultsSegment result (1.39) 19.22 – 17.83

(3.72) (12.49) (0.05) (16.16)Less: Finance Cost 0.31

(0.21)Add: Other unallocable income net of unallocable expenditure

24.17

(12.65)Profit before tax 41.69

(28.60)Tax expense 9.29

(7.16)Profit after tax 32.40

(21.44)assets 45.31 170.90 0.42 216.63

(44.75) (142.23) (0.39) (187.37)Non Segments Assets 355.09

(341.82)total assets 571.72

(529.19)Liabilities 23.57 15.69 0.01 39.27

(13.98) (6.93) (0.03) (20.94)Non Segments liabilities

18.51(12.57)

Total Liabilities 57.78(33.51)

Depreciation – 1.29 0.01 1.30(–) (1.42) (0.02) (1.44)

Capital Expenditure – 1.15 – 1.15(–) (0.81) (–) (0.81)

38. Related Party Disclosure as required by AS–18. a. List of related parties along with nature and volume of transactions is given below:

Subsidiaries of the Company Dalmia Cement (Bharat) Limited, Dalmia Power Limited, Kanika Investment Limited,




Subsidiaries of Dalmia Cement (Bharat) LimitedArjuna Brokers & Minerals Limited, Dalmia Cement Ventures Limited, D.I. Properties Limited, Dalmia Minerals & Properties Limited, Geetee Estates Limited, Hemshila Properties Limited, Ishita Properties Limited, Shri Radha Krishna Brokers & Holdings Limited, Shri Rangam Properties Limited, Sri Dhandauthapani Mines & Minerals Limited, Sri Madhusudana Mines & Properties Limited, Sri Shanmugha Mines & Minerals Limited, Sri Subramanya Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited, Sri Trivikrama Mines & Properties Limited.

Step down Subsidiaries of Dalmia Cement Ventures LimitedGolden Hills Resort Private Limited and Rajputana Properties Private Limited

Step down Subsidiaries of Dalmia Minerals & Properties LimitedCosmos Cements Limited and Sutnga Mines Private Limited

Subsidiary of Dalmia Power LimitedDCB Power Ventures Limited

Associate of the Subsidiary Company Dalmia Cement (Bharat) Limited.OCL India Limited

Joint Ventures of the Subsidiary Company Dalmia Cement (Bharat) LimitedKhappa Coal Company Private Limited

Key Management Personnel of the CompanyShri J. H. Dalmia, Shri Y. H. Dalmia – Managing Director, Shri Gautam Dalmia, Shri Puneet Yadu Dalmia.

Relatives of Key Management PersonnelShri V. H. Dalmia (Brother of Director), Shri J. H. Dalmia (HUF), Smt. Kavita Dalmia (Wife of Director), Shri Y. H. Dalmia (HUF), Smt. Bela Dalmia (Wife of Managing Director), Shri Gautam Dalmia (HUF), Smt. Anupama Dalmia (Wife of Director), Smt. Avantika Dalmia (Wife of Director), Kumari Shrutipriya Dalmia (Daughter of Managing Director), Kumari Sukeshi Dalmia (Daughter of Director), Kumari Vaidehi Dalmia (Daughter of Director), Kumari Sumana Dalmia (Daughter of Director), Kumari Avanee Dalmia (Daughter of Director), Mst. Priyang Dalmia (Son of Managing Director) Shri M. H. Dalmia, (Brother of Director) Smt. Abha Dalmia (Wife of Brother of Director), Shri R. H. Dalmia (Brother of Director).

Enterprises controlled by the Key Management Personnel of the CompanyRama Investment Company Private Limited, Puneet Trading & Investment Company Private Limited, Kavita Trading & Investment Company Private Limited, Sita Investment Company Limited, Mayuka Investment Limited, Ankita Pratisthan Limited, Himgiri Commercial Limited, Valley Agro Industries Limited, Shri Nataraj Ceramic and Chemical Industries Limited, Shri Chamundeswari Minerals Limited, Shree Nirman Limited, Keshav Power Limited, Avanee and Ashni Securities Private Limited, ZipAhead.Com Limited, Alirox Abrasives Limited, Sukeshi Trust, Vaidehi Trust, Sumana Trust, Shrutipriya Dalmia Trust,Priyang Trust, Avanee Trust, Raghu Hari Dalmia Parivar Trust,Dalmia Sugar Ventures Limited, Himshikhar Investment Limited, Dalmia Solar Power Limited, Dalmia Bharat Sugar and Industries Limited, New Habitat Housing Finance and Development Limited.




The following transactions were carried out with the related parties in the ordinary course of business:(` in Crore)

Nature of Transaction Holding Company

Subsidiary Companies

Step–down

Subsidiary

Companies

Associate of

Subsidiary

Key

Management

Personnel

Relatives

of Key

Management

Personnel

Key

Management

Personnel

controlled

enterprises

total

Sale of goods and services – 80.35 – 2.85 – – 5.94 89.14

(–) (64.27) (0.63) (2.72) (–) (–) (8.37) (75.99)

Reimbursement of expenses – receivable

– 0.51 0.09 0.05 – – 4.44 5.09

(–) (14.94) (0.15) (0.06) (–) (–) (3.38) (18.53)

Reimbursement of expenses – payable

– 0.36 – – – – 7.01 7.37

(–) (–) (–) (–) (–) (–) (6.90) (6.90)

Purchase of goods and services – 5.32 – 0.42 – – 29.09 34.83

(–) (5.79) (–) (–) (–) (–) (22.94) (28.73)

Rent Receipts – – – – – – – –

(–) (–) (–) (–) (–) (–) (0.07) (0.07)

Interest Received – – – – – – 3.73 3.73

(–) (–) (–) (–) (–) (–) (1.77) (1.77)

Receipt of fund on their behalf and transfer

– – – – – – – –

(–) (34.50) (–) (–) (–) (–) (20.84) (55.34)

Sale of Equity Shares – – – – – – – –

(–) (–) (10.63) (–) (–) (–) (–) (10.63)

Loans and Advances given – 0.45 – – – – 166.00 166.45

(–) (6.52) (–) (–) (–) (–) (189.20) (195.72)

Loans and advances received back

– 0.59 – – – – 141.00 141.59

(–) (–) (–) (–) (–) (–) (164.20) (164.20)

Sale of Fixed Assets – – – – – – – –

(–) (–) (–) (–) (–) (–) (0.24) (0.24)

Salary and Perquisites – – – – 0.50 – – 0.50

(–) (–) (–) (–) (–) (–) (–) (–)

1. Sale of goods and services includes transaction with Dalmia Cement (Bharat) Limited `80.35 Cr. (Previous Year `64.27Cr.).

2. Reimbursement of expenses – receivable includes transaction with Dalmia Cement (Bharat) Limited ̀ 0.45 Cr. (Previous Year`14.94 Cr.), Shri Nataraj Ceramic and Chemical Industries Limited `4.24 Cr. (`3.38 Cr.).

3. Reimbursement of expenses – payable includes transaction with Shri Nataraj Ceramic and Chemical Industries Limited `6.96 Cr. (Previous Year `6.67 Cr.).

4. Purchase of goods and services includes transaction with Dalmia Cement (Bharat) Limited `5.32 Cr. (Previous Year `5.79 Cr), Shri Nataraj Ceramic and Chemical Industries Limited `27.96 Cr. (Previous Year `21.83 Cr).




5. Rent Receipts includes transaction with Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `0.07 Cr).

6. Interest received includes transaction with Dalmia Bharat Sugar and Industries Limited `3.73 Cr. (Previous Year `1.77 Cr.).

7. Receipt of fund on their behalf and transfer includes transaction withDalmia Cement (Bharat) Limited Nil (Previous Year `34.50 Cr), Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `20.84 Cr).

8. Sale of Equity Shares includes transaction withDCB Power Ventures Limited Nil (Previous Year `10.63 Cr)

9. Loan and advances given includes transaction with Dalmia Bharat Sugar and Industries Limited `166.00 Cr. (Previous Year `189.20 Cr).

10. Loans and advances received back includes transaction with Dalmia Bharat Sugar and Industries Limited `141.00 Cr. (Previous Year `164.20 Cr).

11. Sale of Fixed Assets includes transaction with Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `0.24Cr).

12. Salary &Perquisites includes transaction with Sh. Jai Hari Dalmia `0.25 Cr. (Previous Year Nil), Sh. Yadu HariDalmia `0.25 Cr. (Previous Year Nil).

Balances outstanding at year end:(` in Crore)

Nature of Transaction Holding Company

Subsidiary Companies

Step–down Subsidiary Companies

Associate of Subsidiary

Key Management

Personnel

Relatives of Key

Management Personnel

Key Management

Personnel controlled

enterprises

total

Loans receivable – 7.12 – – – – 50.00 57.12

(–) (6.67) (–) (–) (–) (–) (25.00) (31.67)

Amounts receivable – 0.24 0.08 0.15 – – 2.10 2.57

(–) (9.14) (0.66) (0.04) (–) (–) (31.21) (41.05)

Amounts payable – 1.70 – – – – 1.00 2.70

(–) (–) (–) (–) (–) (–) (2.68) (2.68)

Security deposit receivable – – – – – – 1.25 1.25

(–) (–) (–) (–) (–) (–) (1.25) (1.25)

1. Loan receivable includes Dalmia Power Limited ̀ 7.12 Cr. (Previous Year ̀ 6.67 Cr.), Dalmia Bharat Sugar and Industries Limited `50.00 Cr. (Previous Year `25.00 Cr.).

2. Amount receivable includes Dalmia Cement (Bharat) Limited `0.18 Cr. (Previous Year `9.14 Cr.), Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `29.09 Cr.), Dalmia Solar Power Ltd. `2.10 Cr. (Previous Year `2.10 Cr.).

3. Amount payable includes Dalmia Cement (Bharat) Limited `1.70 Cr. (Previous Year Nil), Shri Nataraj Ceramic and Chemical Industries Limited `0.80 Cr. (Previous Year `2.68 Cr.).

4. Security deposit receivable includes Shri Nataraj Ceramic and Chemical Industries Limited `1.25 Cr. (Previous Year `1.25 Cr).




notes to Financial statementsfor the year ended March 31, 2012 (Contd.)





39. Figures less than ` fifty thousand which are required to be shown separately have been shown at actual in double brackets.

40. Till the year ended March 31, 2011, the Company was using pre–revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to confirm to this year’s classification.



Cash Flow Statement for the year ended March 31, 2012

(` in Crore)2011–2012 2010–2011

a. Cash Flow from Operating ActivitiesNet Profit before tax 41.69 28.60 AdjustmentsDepreciation / Amortisation 1.30 1.44 Dividend Income (0.56) (0.55)Finance Cost 0.31 0.21 Interest Income (7.76) (3.49)(Profit)/Loss on sale of Investments (15.85) (8.61)Assets Written off / Loss on sale of Fixed Assets 0.02 0.12 Operating Profit before working Capital Changes 19.15 17.72 Adjustments for working Capital changes :Inventories (1.57) (0.19)Trade and Other Payables 18.12 5.69 Trade and Other Receivables (68.77) (38.41)Cash Generated from Operations (33.07) (15.19)Direct Taxes Paid (9.91) (11.49)Net Cash from Operating activities (42.98) (26.68)

B. Cash Flow from Investing ActivitiesPurchase of fixed Assets (1.15) (0.81)Proceeds from sale of Fixed Assets 0.04 0.51 (Purchase)/ Sale of Current Investments (net) 52.12 78.77 (Purchase) of Non Current Investments (49.22) – Interest Received 6.30 3.49 Dividend Received from Current Investments 0.56 0.55 Net Cash from Investing Activities 8.65 82.51

c. Cash flow from Financing ActivitiesProceeds / (repayment) of Short term Borrowings 3.88 (1.70)Finance Cost (0.32) (0.21)Dividend Paid (9.94) – Corporate Dividend tax (1.64) – Net cash from / (used in) financing activities (8.02) (1.91)Net increase in Cash and Cash Equivalents (A+B+C) (42.35) 53.92 Cash and Cash Equivalents (Opening Balance) 58.27 0.06 Cash additions pursuant to Scheme of Arrangement – 4.29 Cash and Cash Equivalents (Closing Balance) 15.92 58.27 Change in Cash and Cash Equivalents (42.35) 53.92

Note: 1) Cash and Cash Equivalents components are as per Note 16. 2) Previous year figures have been regrouped/restated whereever considered necessary







ConsolidatedFinanCial



auditors’ Report on Consolidated Financial statements of dalmia Bharat enterprises limited and its subsidiaries

to the Board of directors, dalmia BhaRat enteRpRises limited

We have audited the attached consolidated Balance Sheet of dalmia BhaRat enteRpRises limited (‘the Company’) and its subsidiaries, associate and joint venture (collectively referred to as “the dalmia Group”) as at March 31, 2012, and also the consolidated Statement of Profit and Loss and the consolidated Cash Flow statement (the consolidated financial statements) for the year ended on that date, annexed thereto. These consolidated financial statements are the responsibility of the Company’s management and have been prepared by the management on the basis of separate financial statements and other financial information regarding subsidiaries, joint venture and associate. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are prepared, in all material respects, in accordance with identified financial reporting framework and are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We did not audit the financial statements of the joint venture and 20 subsidiaries, except three subsidiaries Dalmia Cement (Bharat) Limited, Ishita Properties Limited and DCB Power Ventures Limited, whose financial statements reflect total assets of `316.93 Crore (Previous Year `375.64 Crore) as at March 31, 2012, total revenues of `3.60 Crore (Previous Year `6.89 Crore) and total cash flows of `(1.37) Crore (Previous Year `1.94 Crore) for the year then ended. We also did not audit the financial statements of the associate in which the share of profit of the Dalmia Group is `14.43 Crore (Previous Year `51.93 Crore). These financial statements have been audited by other auditors whose reports have been furnished

to us, and our opinion in so far as it relates to amount included in respect of other subsidiaries and Joint venture is based solely on the report of other auditors.

We report that the Consolidated Financial Statements have been prepared by the Company in accordance with the requirements of Accounting Standard (AS) - 21, ‘Consolidated Financial Statements’, Accounting Standard (AS) – 23 ‘Accounting for investment in Associates in Consolidated Financial Statements’ and Accounting Standard (AS) - 27 ‘Financial reporting of Interest in Joint Venture’s notified pursuant to the Companies (Accounting Standards) Rules, 2006 (as amended) and on the basis of the separate audited financial statements of the subsidiaries, associate and joint venture included in the Consolidated Financial Statements.

Based on our audit and on consideration of the reports of other auditors on separate financial statements and on the other financial information of the subsidiaries, joint venture and associate, and to the best of our information and according to the explanations given to us, we are of the opinion that the attached Consolidated Financial Statements give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of Consolidated Balance Sheet, of the consolidated state of affairs of the Dalmia Group as at March 31, 2012;

b) in the case of Consolidated Statement of Profit & Loss, of the consolidated results of operations of the Dalmia Group for the year ended on that date; and

c) in the case of Consolidated Cash Flow Statement, of the consolidated cash flows of the Dalmia Group for the year ended on that date.

For s. s. KothaRi mehta & Co. Chartered Accountants


arun K. tulsianPlace: New Delhi PartnerDate : May 18, 2012 Membership No. 089907



Consolidated Balance sheet as at march 31, 2012


march 31, 2012as at

march 31, 2011eQUitY & liaBilitiesshareholders' FundsShare Capital 2 16.24 16.24 Reserves and Surplus 3 2,874.59 2,761.45

2,890.83 2,777.69 Preference Capital Held by others 0.70 0.70 Minority Interest 427.16 408.63 non- Current liabilitiesLong-Term Borrowings 4 1,501.52 1,803.18 Deferred Tax Liability (Net) 5 92.71 53.09 Other Long-Term Liabilities 6 85.87 81.93 Long Term Provisions 7 12.69 3.15 Current liabilities Short-Term Borrowings 8 225.04 34.28 Trade Payables 9 151.13 115.20 Other Current Liabilities 10 223.81 227.92 Short-Term Provisions 11 32.83 19.11

632.81 396.51 total 5,644.29 5,524.88 assetsnon-Current assetsFixed assetsTangible Assets 12 3,430.97 3,566.58 Intangible Assets 12 23.88 25.33 Capital work-in-progress 116.51 116.68

3,571.36 3,708.59 Non-Current Investments 13 762.19 466.21 Long-Term Loans and Advances 14 186.92 139.22 Current assetsCurrent Investments 15 431.34 193.00 Inventories 16 261.47 297.64 Trade Receivables 17 135.45 100.80 Cash and Cash Equivalents 18 66.37 454.32 Short-Term Loans and Advances 19 225.43 161.34 Other Current Assets 20 3.76 3.76

1,123.82 1,210.86 total 5,644.29 5,524.88 Significant Accounting Policies 1The accompanying notes are an integral part of the financial statements.


For s. s. Kothari metha & Co. For and on behalf of Board of DirectorsChartered Accountants of dalmia Bharat enterprises limitedFirm Registration No. 000756N

per arun K. tulsian nidhi Bisaria Vipin agarwal puneet Yadu dalmia Y. h. dalmiaPartner Company Secretary Executive Director Director Managing DirectorMembership No. 089907 (Finance)




Statement of Consolidated Profit and Loss for the year ended march 31, 2012


march 31, 2012For the year ended

march 31, 2011incomeRevenue from operations (gross) 21 2,625.17 1,969.00 Less: Excise Duty 294.81 223.07 Revenue from operations (Net) 2,330.36 1,745.93 Other income 22 87.37 54.29 total Revenue (i) 2,417.73 1,800.22 expensesConsumption of Raw materials 23 252.22 194.86 Purchase of traded goods 2.85 0.44 (Increase)/ Decrease in inventories of finished goods, work in progress and traded goods

24 (2.58) 6.35

Employee benefit expenses 25 143.72 106.74 Other Expenses 26 1,378.57 1,072.73 total (ii) 1,774.78 1,381.12 earnings before interest, tax, depreciation and amortisation (eBitda) (i) - (ii)

642.95 419.10

Finance Costs 27 151.28 172.43 Depreciation and amortisation expenses 12 181.73 175.27 Profit before exceptional items and tax 309.94 71.40 Exceptional Item - pre-operative expenses / cenvat credit balance written off

39.54 -

Profit before tax 270.40 71.40 tax expenseCurrent tax 77.08 19.04 MAT Credit (Entitlement) / Charge 6.11 (10.93)

83.19 8.11 Deferred Tax 39.62 52.52 Prior year tax charge 0.04 0.45 total tax expense 122.85 61.08 Profit after Tax before Share of Profit in Associates 147.55 10.32 Add: Share of Profit in Associates 14.43 51.93 less: share of minority interest 18.53 12.48 Profit after Tax 143.45 49.77 earning per share 28Basic and Diluted Earnings Per Share (In `) 17.67 6.13 [Nominal Value of Share `2 (`2) each] Significant Accounting Policies 1








notes to Consolidated Financial statements for the year ended march 31, 2012


a. Basis of preparationThe consolidated financial statements of the group have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The group has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for assets transferred and vested in the group as on April 1, 2010 pursuant to the Scheme of Arrangement which are carried at fair market value determined as on April 1, 2010.


The CFS relate to Dalmia Bharat Enterprises Limited (hereinafter referred as the “Company”) and its Subsidiaries, Associate and Joint Venture (herein after referred as the “Group”).

B. principles of ConsolidationIn the preparation of these Consolidated Financial Statements, investment in Subsidiaries, Associate and Joint Venture have been accounted for in accordance with Accounting Standard (AS) 21 – Consolidated Financial Statements, Accounting Standard (AS) 23 – Accounting for Investments in Associates in Consolidated Financial Statements and Accounting Standard (AS) 27 – Financial Reporting of Interests in Joint Ventures. The Consolidated Financial Statements have been prepared on the following basis.

1. Subsidiaries have been consolidated on a line-by-line basis by adding together the book values of like items of assets, liabilities, income and expenses, after eliminating all significant intra-group balances and intra-group transactions and also unrealised profits or losses, except where cost cannot be recovered.

2. Minorities’ interest in net profit of consolidated subsidiaries for the year is identified and adjusted against the income in order to arrive at the net income attributable to the shareholders of the

Company. Their share of net assets is identified and presented in the Consolidated Balance Sheet separately. Where accumulated losses attributable to the minorities are in excess of their equity, in the absence of the contractual obligation on the minorities, the same is accounted for by the holding Company.

3. Interests in the assets, liabilities, income and expenses of the joint venture are consolidated using proportionate consolidation method. Intra group balances, transactions and unrealised profits/ losses are eliminated to the extent of Company’s proportionate share.

4. The difference of the cost to the Company of its investment in subsidiaries and joint venture over its proportionate share in the equity of the Investee Company as at the date of acquisition of stake is recognised in the financial statements as Goodwill or Capital Reserve, as the case may be.

5. Investment in entities in which the Group has significant influence but not controlling interest, are reported according to the equity method i.e. the investment is initially recorded at cost adjusted thereafter for post-acquisition change in the Company’s share of net assets of the associates. The consolidated Profit and Loss account includes the Company’s share of the result of the operations of the associate.

Unrealised profits and losses resulting from transactions between the investor (or its consolidated subsidiaries) and the associate have been eliminated to the extent of the investor’s interest in the associate. Unrealised losses have not been eliminated if and to the extent the cost of the transferred asset cannot be recovered.

6. Goodwill/Capital reserve arising on the acquisition of an associate by an investor is included in the carrying amount of investment in the associate and is disclosed separately.

7. The Consolidated Financial Statements have been prepared using uniform accounting policies for like



transactions and other events in similar circumstances and are presented to the extent possible, in the same manner as the Company’s separate financial statements. Differences in accounting policies have been disclosed separately.

8. The difference between the proceeds from disposal of investment in subsidiary and the carrying amount of its assets less liabilities as of the date of disposal is recognised in the Consolidated Profit and Loss Account as the profit or loss on disposal of investment in subsidiary.

9. The accounts of all the Group Companies are drawn up to the same reporting date as the parent entity (i.e. financial year ended March 31, 2012).

C. Presentation and disclosure of financial statementsDuring the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the group, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The group has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

d. Use of estimatesThe preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

E. Tangible fixed assetsFixed assets, except for assets transferred and vested in the group as on April 1, 2010 pursuant to the Scheme of Arrangement, are stated at cost, net of accumulated

depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.



F. Depreciation on tangible fixed assetsDepreciation on fixed assets is calculated using the rates arrived at based on the useful lives estimated by the management, or those prescribed under Schedule XIV to the Companies Act, 1956, whichever is higher. The group has used the rates different from rates prescribed in Schedule XIV in the following case:-

Rates (SLM)Polysius Kiln Buildings 7.14%

G. intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated amortisation and accumulated impairment losses, if any.

Intangible assets are amortised on a straight line basis over the estimated useful economic life. The group uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the effect that useful life of an intangible asset exceeds ten years, the group amortises the intangible asset over the best estimate of its useful life. Such intangible assets

notes to Consolidated Financial statements for the year ended march 31, 2012 (contd.)



and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of Profit and Loss when the asset is derecognised.

A summary of amortisation policies applied to the group’s intangible assets is as below:

Rates (SLM)Computer software 20% to 33.33%

h. leases Where the group is lesseeFinance leases, which effectively transfer to the group substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the statement of Profit and Loss. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the group will obtain the ownership by the end of the lease term, the capitalised asset is depreciated on a straight-line basis over the shorter of the estimated useful life of

the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of Profit and Loss on a straight-line basis over the lease term.

Where the group is the lessorLeases in which the group transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognised as a receivable at an amount equal to the net investment in the lease. After initial recognition, the group apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognised in the statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of Profit and Loss.

Leases in which the group does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognised in the statement of Profit and Loss on a straight-line basis over the lease term. Costs, including depreciation, are recognised as an expense in the statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of Profit and Loss.

i. Borrowing costsBorrowing cost includes interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.


J. impairment of tangible and intangible assetsThe group assesses at each reporting date whether there is an indication that an asset may be impaired. If




any indication exists, or when annual impairment testing for an asset is required, the group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The group bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses, including impairment on inventories, are recognised in the statement of Profit and Loss.

K. Goodwill on ConsolidationGoodwill represents the difference between the Group’s share in the net worth of the investee companies and the cost of acquisition at the date of investment. For this purpose, the Groups’ share of equity in the investee companies is determined on the basis of the latest financial statements of the respective companies available as on the date of acquisition, after making necessary adjustments for material events between the date of such financial statements and the date of acquisition.

l. Government grants and subsidiesGrants and subsidies from the government are recognised when there is reasonable assurance that (i) the group will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of Profit and Loss over the periods necessary to match them with

the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and released to income in equal amounts over the expected useful life of the related asset.

Where the group receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In case a non-monetary asset is given free of cost, it is recognised at a nominal value.

m. investmentsInvestments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.



On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of Profit and Loss.

n. inventoriesRaw materials, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold at or above cost. Cost of raw materials and stores and spares is determined on a weighted average basis.


Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of




completion and estimated costs necessary to make the sale.

o. Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the group and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

sale of goodsRevenue from sale of goods is recognised when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The group collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the group. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

interestInterest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of Profit and Loss.

dividendsDividend income is recognised when the group’s right to receive dividend is established by the reporting date.

insurance ClaimClaims lodged with the insurance companies are accounted on accrual basis to the extent these are measurable and ultimate collection is reasonably certain.

p. Foreign currency translationForeign currency transactions and balancesinitial recognitionForeign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

ConversionForeign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or

other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

exchange differencesAll other exchange differences are recognised as income or as expenses in the period in which they arise.

Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liabilityThe premium or discount arising at the inception of forward exchange contract is amortised and recognised as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the statement of Profit and Loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as expense for the period.

Q. Retirement and other employee benefitsRetirement benefit in the form of provident fund contribution to Statutory Provident Fund, pension fund, superannuation fund and ESI are defined contribution schemes. The contributions are charged to the statement of Profit and Loss for the year when the contributions are due. The group has no obligation, other than the contribution payable to the provident fund.

The group operates two defined benefit plans for its employees, viz., gratuity and provident fund contribution to Dalmia Cement Provident Fund Trust. The costs of providing benefits under these plans are determined on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognised in full in the period in which they occur in the statement of Profit and Loss.

Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit. The group measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The group treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the




actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of Profit and Loss and are not deferred.

R. income taxesTax expense comprises of current and deferred. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date.


Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the group has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each reporting date the group re-assesses unrecognised deferred tax assets. It recognises unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The group writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxable

entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of Profit and Loss as current tax. The group recognises MAT credit available as an asset only to the extent that there is convincing evidence that the group will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the group recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of Profit and Loss and shown as “MAT Credit Entitlement.” The group reviews the “MAT credit entitlement” asset at each reporting date and writes down the asset to the extent the group does not have convincing evidence that it will pay normal tax during the specified period.

s. segment reportingIdentification of segmentsThe group’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different m arkets. The analysis of geographical segments is based on the areas in which major operating divisions of the group operate.

inter-segment transfersThe group generally accounts for inter segment sales and transfers at cost plus appropriate margins.

allocation of common costsCommon allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.


segment accounting policiesThe group prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the group as a whole.

t. earnings per shareBasic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity




shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.


U. provisionsA provision is recognised when the group has a present obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

The expense relating to any provision is presented in the statement of Profit and Loss net of any reimbursement.

V. Contingent liabilitiesA contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the group or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The group does not recognise a contingent liability but discloses its existence in the financial statements.

W. Cash and Cash equivalentsCash and Cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

X. measurement of eBitdaAs permitted by the Guidance Note on the Revised Schedule VIto the Companies Act, 1956, the group has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the statement of Profit and Loss. The group measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the group does not include depreciation and amortisation expense, finance costs and tax expense.




2. share Capital(` in Crore)

as at march 31, 2012

as atmarch 31, 2011

authorised :10,00,00,000 (10,00,00,000) Equity Shares of `2/– each 20.00 20.00

20.00 20.00 issued, subscribed and Fully paid Up :8,11,89,303 (8,11,89,303) Equity Shares of `2/– each 16.24 16.24

16.24 16.24

a. Reconciliation of equity shares outstanding at the beginning and at the end of the reporting periodmarch 31, 2012 march 31, 2011

no. of shares (` in Crore) no. of shares (` in Crore)At the beginning of the period 81,189,303 16.24 250,000 0.50 Issued during the period – – 80,939,303 15.74 At the end of the period 81,189,303 16.24 81,189,303 16.24

b. terms/ rights attached to equity sharesThe Company has only one class of equity shares having a face value of `2 per share. Each equity shareholder is entitled to one vote per share. In the event of winding - up of the Company, the equity share holder shall be entitled to be repaid remaining assets of the Company after distribution of all preferential amounts, in the ratio of the amount of capital paid up on such equity shares.

c. aggregate number of bonus shares issued, shares issued for consideration other than cash and shares bought back during the period of five years immediately

march 31, 2012 march 31, 2011no. of shares no. of shares

Shares issued pursuant to Scheme of Arrangement between the Company and Dalmia Cement (Bharat) Limited (formerly Avnija Properties Limited), DCB Power Ventures Limited, Dalmia Bharat Sugar and Industries Limited (formerly Dalmia Cement (Bharat) Limited) without payments being received in cash.

– 80,939,303

d. details of shareholders holding more than 5% shares in the Companymarch 31, 2012 march 31, 2011

no. of shares

% holding no. of shares

% holding

Mayuka Investment Limited 17,736,537 21.85% 17,736,537 21.85%Shree Nirman Limited 6,540,130 8.06% 6,540,130 8.06%Sita Investment Company Limited 5,876,800 7.24% 5,876,800 7.24%Ankita Pratisthan Limited 5,829,070 7.18% 5,829,070 7.18%




3. Reserves and surplus (` in Crore)

march 31, 2012 march 31, 2011Capital ReserveOpening Balance as per last financial statements 11.25 –Add: Additions during the year – 11.25 Closing Balance 11.25 11.25 Business Restructuring ReserveOpening Balance as per last financial statements 2,562.70 – Add: Additions pursuant to Scheme of Arrangement – 2,562.70 Closing Balance 2,562.70 2,562.70 securities premium ReserveOpening Balance as per last financial statements 458.70 – Add: Premium on issue of equity shares – 462.08 Less: Expenses incurred in connection with issue of fresh equity shares – 3.38 Closing Balance 458.70 458.70 General ReserveOpening Balance as per last financial statements 2.20 – Add: Transfer from surplus balance in statement of Profit and Loss 3.25 2.20 Closing Balance 5.45 2.20 Reserve Fund as per RBiOpening Balance as per last financial statements 0.03 –Add: Transfer from surplus balance in statement of Profit and Loss – 0.03 Closing Balance 0.03 0.03 debenture Redemption ReserveOpening Balance as per last financial statements 48.75 – Add: Additions pursuant to Scheme of Arrangement – 48.96 Add: Amount transferred from surplus balance in the Statement of Profit and Loss 9.79 9.79 Less: Amount transferred to surplus balance in the Statement of Profit and Loss – 10.00 Closing Balance 58.54 48.75 Surplus in the Statement of Profit and LossBalance as per last financial statements 36.05 0.10 Profit for the year 143.45 49.77

Add: Transfer from Debenture Redemption Reserve – 10.00

Less: Appropriations Transfer to Debenture Redemption Reserve 9.79 9.79

Transfer to General Reserve 3.25 2.20

Transfer to Reserve Fund as per RBI – 0.03

Proposed Dividend on equity shares 26.08 10.15

Dividend Distribution Tax 4.23 1.65

Total Appropriations 43.35 23.82 Net Surplus in the Statement of Profit and Loss 136.15 36.05 total Reserves and surplus 3,232.82 3,119.68 Less: Minority Interest 358.23 358.23

2,874.59 2,761.45




4. long term Borrowings(` in Crore)


as atmarch 31, 2011

securedA. Redeemable Non-Convertible Debentures 280.00 280.00Less: Shown in current maturities of long term borrowings 24.00 256.00 – 280.00B.Term Loans:i. From Banks 987.16 1,261.84Less: Shown in current maturities of long term borrowings 70.51 916.65 84.34 1,177.50ii. From Others 256.20 256.20(a) 1,428.85 1,713.70UnsecuredC. Fixed Deposits 6.56 18.47Less: Shown in current maturities of long term borrowings 3.18 3.38 3.68 14.79D. Deferred payment liabilities 73.71 78.46Less: Shown in current maturities of long term borrowings 4.73 68.98 4.10 74.36E. From Banks 0.33 0.35Less: Shown in current maturities of long term borrowings 0.02 0.31 0.02 0.33(B) 72.67 89.48total long term borrowings (a+B) 1,501.52 1,803.18

1) Debentures referred to in A above to the extent of:

i) 10.35%, Series XIII `100 Cr. (`100 Cr.) are secured by a first pari-passu charge on the Immovable properties of Cement unit at Dalmiapuram & redeemable in three yearly equal instalments commencing from May 8, 2014.

ii) 9.00%, Series XI A `50 Cr. (`50 Cr.) are secured by a first pari-passu charge on all the movable and immovable properties of Cement Unit at Dalmiapuram (except inventories and trade receivables) & redeemable in three yearly instalments in the ratio of 30:30:40 commencing from October 15, 2013.

iii) 8.87%, Series XI `50 Cr. (`50 Cr.) are secured by a first pari-passu charge on all the movable and immovable properties of Cement unit at Dalmiapuram (except inventories and trade receivables) & redeemable in three yearly instalments in the ratio of 30:30:40 commencing from May 15, 2013.

iv) 9.00%, Series XB ̀ 40 Cr. (`40 Cr.) are secured by a first pari-passu charge on whole of the movable and immovable properties (except trade receivables) of Cement unit at Dalmiapuram & redeemable in three yearly instalments in the ratio of 30:30:40 commencing from December 17, 2012.

v) 8.90%, Series XA ̀ 40 Cr. (`40 Cr.) are secured by a first pari-passu charge on whole of the movable and immovable properties (except trade receivables) of Cement unit at Dalmiapuram & redeemable in three yearly instalments in the ratio of 30:30:40 commencing from December 17, 2012.

2) Term Loans from Banks referred to in B (i) above to the extent of :

i) Libor plus 2.146% (presently 2.9313%) `58.66 Cr. (`60.34 Cr.) are secured by way of exclusive charge on Vertical roller mills & other machineries and equipments acquired through this loan for projects at Kadapa & Ariyalur. The Loan has been availed in foreign currency repayable in half yearly installments of USD 0.10 Cr. each till August 2017.

ii) `891.00 Cr. (`891.00 Cr.) are secured by exclusive first charge on land and building and hypothecation of all the fixed assets of Cement units at Kadapa and Ariyalur excluding assets charged to working capital lenders and Vertical roller mills & other machineries and equipments for projects at Kadapa & Ariyalur acquired under foreign currency loan at base rate plus 1.50% (present 11%). It is repayable within 40 unequal quarterly installment in the




range of `11.14 Cr. to `47.33 Cr. each commencing after 5 years from 1st disbursement, i.e. December 2012.

iii) `37.50 Cr. (`112.50 Cr.) are secured by exclusive first charge on land and building and hypothecation of all the fixed assets of Cement units at Kadapa and Ariyalur excluding assets charged to working capital lenders and Vertical roller mills & other machineries and equipments for projects at Kadapa & Ariyalur acquired under foreign currency loan at Base rate plus 1.50% (present 11%). It is payable in 2 equal quarterly installment of `18.75 Cr. each till September 2012.

iv) Nil (`150 Cr.) is secured by a subservient charge on the assets of Cement division.

v) Nil (`48.00 Cr.) is secured by first charge on all the immovable properties of Dalmia Cement Venture Limited both present and future and first charge by way of hypothecation of all the movable of Dalmia Cement Venture Limited including movable Plant and Machinery, Machinery spares, tools and accessories, fixtures, vehicles, mechanical and electrical equipments, mining machinery and all others movable assets, except book debts, present and future; subject to prior charges created and / or to be created on the stock of raw materials, semi-finished and finished goods, consumable stores, book debts / receivable and such other movables as may be agreed to by the senior Lenders and other current assets for securing the borrowings for working capital requirements, in the ordinary course of business.

3) Term Loans from others referred to in B (ii) above to the extent of:

0.10%, `256.20 Cr. (`256.20 Cr.) are secured by a first pari-passu charge on the movable and immovable properties of Cement unit at Dalmiapuram. Repayment schedule is yet to be finalised.

4) Fixed deposit referred to in C above to the extent of:

`6.56 Cr. (`18.47 Cr.) are repayable in next 1 month to 36 months with interest rate in the range of 9% to 10%.

5) Interest free, ̀ 73.71 Cr. (`78.46 Cr.) deferred payment liabilities referred to in D above are repayable in unequal quarterly installments in the range of `0.05 Cr. to `6.59 Cr. each till FY 2016-17.

6) Housing loans from Bank referred to in E above to the extent of `0.05 Cr. (`0.07 Cr.) is payable in unequal monthly installment in the range of `0.0018 Cr. to `0.0025 Cr. each till FY 2014-15. For `0.28 Cr. (`0.28 Cr.) repayment terms are yet to be communicated by bank.

5. deferred tax liability (net)(` in Crore)


as atmarch 31, 2011

Deferred Tax assets/ liabilities are attributable to the following items :liabilitiesDepreciation 98.89 71.45assetsUnabsorbed depreciation - 16.44Expenses allowable for tax purpose when paid 4.77 1.76Provision for doubtful debts and advances 1.32 0.16Others 0.09 -

6.18 18.36net 92.71 53.09




6. other long term liabilities(` in Crore)


as atmarch 31, 2011

Security deposit received 80.23 80.14Mines reclamation expenses 2.21 –Other Liabilities 3.43 1.79

85.87 81.93

7. long term provisions (` in Crore)


as atmarch 31, 2011

Provision for employee benefits 12.69 3.1512.69 3.15

8. short term Borrowings(` in Crore)


as atmarch 31, 2011

securedA. Working capital loan from Banks 16.48 26.46B. Foreign currency loan 207.53 –(a) 224.01 26.46UnsecuredC. Fixed Deposits 1.03 7.82(B) 1.03 7.82total short term borrowings (a+B) 225.04 34.28

A) Working capital loans are secured by hypothecation of inventories and other assets in favour of the participating banks ranking pari-passu on inter-se basis, repayable in next one year and carry interest rate in the range of 11.75% to 12.50%.

B) Foreign currency loans have been secured against the pledge of mutual funds and hypothecation of inventories and trade receivabels repayable in next 1 month to 11 months with Interest in the range of LIBOR Plus 0.35% to LIBOR plus 1.95% (Presently 0.8237% to 2.55%).

C) Fixed deposit referred to in C above to the extent of: `1.03 Cr. (`7.82 Cr.) are repayable in next 1 month to 1 year with interest rate in the range of 9.00% to 9.25%.

9. trade payables(` in Crore)


as atmarch 31, 2011

Micro & Small Enterprises 0.07 –Others 151.06 115.20

151.13 115.20




10. other Current liabilities(` in Crore)


as atmarch 31, 2011

Current maturities of long term borrowings 102.44 92.14Interest accrued but not due on borrowings 6.29 6.15Advances from customers 17.06 16.71Security deposit received 9.73 11.33Director’s Commission payable 0.62 0.22Unclaimed Fixed Deposits and interest theron* 0.17 0.20Unclaimed Dividend* 0.21 –Other liabilities - Statutory dues 51.03 52.01 - Others 36.26 49.16

223.81 227.92

* Not due for deposit in Investor Education & Protection Fund

11. short term provisions(` in Crore)


as atmarch 31, 2011

Provision for tax (net of advance tax ` Nil ( `3.78 Cr.)) 0.02 6.82 Provision for employee benefits 2.50 0.49 Proposed Dividend on equity shares 26.08 10.15 Dividend Distribution Tax 4.23 1.65

32.83 19.11

12. Fixed assets(` in Crore)

tangibleown assets

land land (leasehold)

Building plant and equipment

Furniture and Fixtures

Vehicles Office equipment

total

Costas at April 1, 2010 – – – – – – – Addition pursuant to Scheme of Arrangement

384.69 1.74 231.67 2,630.19 5.17 15.50 21.07 3,290.03

Additions during the year 38.93 – 34.87 44.52 0.29 0.75 0.93 120.29 Disposals during the year 6.11 – – 0.20 0.04 1.89 0.06 8.30 as at march 31, 2011 417.51 1.74 266.54 2,674.51 5.42 14.36 21.94 3,402.02 Additions during the year 22.16 – 1.44 33.23 0.18 1.85 2.50 61.36 Disposals during the year 4.80 – 0.10 12.34 0.01 0.07 0.10 17.42 as at march 31, 2012 434.87 1.74 267.88 2,695.40 5.59 16.14 24.34 3,445.96 depreciation/ amortisationas at April 1, 2010 – – – – – – – – Addition pursuant to Scheme of Arrangement

– 1.10 3.29 1.07 1.13 0.42 2.25 9.26

Charge for the year @ – 0.06 7.14 141.00 0.81 1.72 3.13 153.86 Disposals – – – – – – – – as at march 31, 2011 – 1.16 10.43 142.07 1.94 2.14 5.38 163.12 Charge for the year – 0.05 7.56 147.74 0.37 1.60 2.69 160.01 Disposals – – – 0.41 – – 0.01 0.42 as at march 31, 2012 – 1.21 17.99 289.40 2.31 3.74 8.06 322.71 net Blockas at march 31, 2011 417.51 0.58 256.11 2,532.44 3.48 12.22 16.56 3,238.90 as at march 31, 2012 434.87 0.53 249.89 2,406.00 3.28 12.40 16.28 3,123.25




(` in Crore)owned assets leased out intangible Grand

totalland Building plant and

equipmentFurniture

and Fixtures

other assets

total Computer software

Goodwill on

Consoli-dation

total

Costas at April 1, 2010 – – – – – – – – – – Additions – – – – – – – – – – Addition pursuant to Scheme of Arrangement

2.30 11.88 195.07 0.05 – 3,499.33 4.66 – 4.66 3,503.99

Additions during the year – 0.27 137.91 0.01 0.03 258.51 0.27 22.04 22.31 280.82 Disposals during the year – – – – – 8.30 – – – 8.30 as at march 31, 2011 2.30 12.15 332.98 0.06 0.03 3,749.54 4.93 22.04 26.97 3,776.51 Additions during the year – – 0.04 0.02 – 61.42 0.25 – 0.25 61.67 Disposals during the year – – – – – 17.42 – – – 17.42 as at march 31, 2012 2.30 12.15 333.02 0.08 0.03 3,793.54 5.18 22.04 27.22 3,820.76 depreciation/ amortisationas at April 1, 2010 – – – – – – – – – – Addition pursuant to Scheme of Arrangement

– – – – – 9.26 0.03 – 0.03 9.29

Charge for the year – 0.40 19.44 – – 173.70 1.61 – 1.61 175.31 Disposals – – – – – – – – – – as at march 31, 2011 – 0.40 19.44 – – 182.96 1.64 – 1.64 184.60 Charge for the year – 0.40 19.62 – – 180.03 1.70 – 1.70 181.73 Disposals – – – – – 0.42 – – – 0.42 as at march 31, 2012 – 0.80 39.06 – – 362.57 3.34 – 3.34 365.91 net Blockas at march 31, 2011 2.30 11.75 313.54 0.06 0.03 3,566.58 3.29 22.04 25.33 3,591.91 as at march 31, 2012 2.30 11.35 293.96 0.08 0.03 3,430.97 1.84 22.04 23.88 3,454.85

notes:@ Includes depreciation charged to other heads Nil (` 0.04 Cr.)

13. non–Current investments (` in Crore)


as atmarch 31, 2011

trade investmentsequity sharesin associatesOCL India Limited* (Quoted) 453.99 449.88 othersEquity Shares (Quoted) 0.01 0.02 Equity Shares (Unquoted) 30.18 2.25 Less: Provision for diminution in value of investments 1.76 28.42 1.76 0.49 Zero coupon optionally redeemable convertible debentures 59.00 -other investmentsUnits of mutual Funds (Quoted)Debt based schemes 209.18 3.70 Equity based schemes 0.06 0.06 tax Free Bonds (Quoted) 0.50 – Units of Urban infrastructure opportunities Fund (Unquoted) 11.03 12.06 total 762.19 466.21




(` in Crore)as at

march 31, 2012as at

march 31, 2011 Quoted (including Mutual Funds): Book Value 663.74 453.66

Market Value 470.93 289.50

Book Value of Unquoted Investments 98.45 12.55

Aggregate Provision for diminution in value of Investment 1.76 1.76

notes:* The carrying amount of investment includes Goodwill of `46.96 Cr.

14. long term loans and advances (Considered good and unsecured unless otherwise stated)(` in Crore)


as atmarch 31, 2011

Capital advances 62.57 65.93 Security deposit made- Related Parties 1.25 1.25 - Others 19.14 20.39 17.59 18.84 Loans and advances to:Employees@ 1.88 0.06 Others 40.00 – Advances recoverable in cash or in kind or for value to be received

31.84 14.96

MAT credit entitlement 4.94 11.05 Advance Income Tax (Net of Provision for Tax `84.37 Cr. (`11.75 Cr.))

14.61 4.78

Deposit and Balances with Government Departments and Other Authorities

10.69 23.60

186.92 139.22 @includesDue form officers of the Company 1.75 0.05

15. Current investments (` in Crore)


as atmarch 31, 2011

non tradeequity shares (Quoted) 20.42 32.36 Less: Provision for diminution in value of investment 3.92 16.50 6.28 26.08 Units of mutual Funds (Quoted)Debt based schemes 414.84 166.92 total 431.34 193.00 Quoted Book Value 431.34 193.00 Market Value 435.44 204.55 Aggregate Provision for diminution in value of Investment

3.92 6.28




16. inventories(` in Crore)


as atmarch 31, 2011

Raw materials On hand 24.06 23.06 In transit 1.65 0.28Work in progress 37.44 30.27Finished Goods On hand 32.74 38.65 In transit 7.16 5.84stores, spares etc On hand 130.96 101.99 In transit 27.46 97.55

261.47 297.64

17. trade Receivables(` in Crore)


as atmarch 31, 2011

a) Receivables outstanding for a period exceeding six months from the date they are due for payment Considered good Secured 0.96 0.79 Unsecured 3.14 4.11 Considered doubtful 14.11 13.89 Less: Provision for Bad and Doubtful receivables 14.11 – 13.89 – (a) 4.10 4.90 b) other receivables Considered good Secured 60.73 39.88 Unsecured 145.59 94.85 (B) 206.32 134.73 Trade Receivables (a+B) 210.42 139.63 Less: Provision for Rebate / Discount 74.97 38.83

135.45 100.80 18. Cash and Cash equivalents

(` in Crore)as at

march 31, 2012as at

march 31, 2011Cash on hand 0.10 0.13 Cheques in Hand 13.38 0.20 Balances with Scheduled Banks : -On current accounts 48.49 284.46 -On deposit accounts 4.03 169.37 -Unpaid Dividend accounts 0.21 – Other bank balances: -Margin money (pledged with bank against bank guarantee)

0.16 0.16

66.37 454.32




19. short term loans and advances(` in Crore)


as atmarch 31, 2011

SecuredLoan to Employees@ 0.02 0.06 Unsecured Considered goodLoan to - Employees@ 1.56 2.28 - Related parties (Refer note 42 of notes to financial statements)

50.00 25.00

- Others 85.00 – Advances recoverable in cash or in kind or for value to be receivedRelated parties (Refer note 42 of notes to financial statements)

0.34 32.12

Others 64.50 52.94 Prepaid Expenses 0.53 0.46 Interest receivable 4.72 3.17 Deposit and Balances with Government Departments and Other Authorities

18.76 45.31


20. other Current assets(` in Crore)


as atmarch 31, 2011

Semi Finished Capital goods lying with foreign suppliers 3.76 3.76 3.76 3.76

21. Revenue from operations(` in Crore)

For the year ended march 31, 2012

For the year endedmarch 31, 2011

Cement sales 2,498.49 1,811.79 Refractory goods sales 70.59 62.21 Management services 5.67 8.20 Other sales and Operating Revenue 50.42 86.80

2,625.17 1,969.00




22. other income(` in Crore)



Dividend income- from Current Investments 12.88 0.56

Interest Income on Bank deposits & others 16.01 11.46 Profit on sale of Investments 25.68 117.91 (including provision for diminution in value of investments written back)Less: Loss on Sale of Investment (including provision for diminution in value of investments)

– 25.68 97.28 20.63

Exchange Fluctuation 0.11 0.13 Sales Tax incentive (refer note 38 of financial statements) 11.82 6.30 Miscellaneous Receipts 20.87 15.21

87.37 54.29

23. Cost of Raw materials Consumed(` in Crore)



Class of productLimestone 115.57 82.37 Gypsum 25.76 26.00 Fly ash 50.46 40.66 Bauxite 30.25 27.53 Others 30.18 18.30

252.22 194.86

24. (Increase)/ Decrease in inventories of finished goods and work in progress(` in Crore)



Finished Goods- Closing stock 39.9 44.49- Opening stock 44.49 –- Addition pursuant to Scheme of Arrangement – 28.47 28.47

4.59 (16.02)Work-in-Progress

- Closing stock 37.44 30.27- Opening stock 30.27 –- Addition pursuant to Scheme of Arrangement – 52.64 52.64

(7.17) 22.37(Increase) / Decrease (2.58) 6.35




25. employee Benefit expenses(` in Crore)



Salaries, Wages and Bonus 122.67 86.29 Contribution to Provident Fund and Other Funds 7.07 7.83 Workmen and Staff Welfare expenses 13.98 12.62

143.72 106.74

26. other expenses(` in Crore)



Power and Fuel 672.66 516.30 Processing Charges 22.81 19.64 Packing Materials 98.87 77.00 Consumption of Stores and Spares Parts 5.65 3.08 Freight Charges 317.35 249.00 Repairs and Maintenance :

- Plant & Machinery 60.40 47.49 - Buildings 3.03 2.98

Rent 3.35 3.51 Rates and Taxes 3.20 3.08 Insurance 2.49 2.71 Branch Selling Expenses 54.32 43.46 Foreign exchange fluctuation 5.36 – Miscellaneous Expenses 129.08 104.48

1378.57 1072.73

27. Finance Costs (` in Crore)



Interest - On term loans and debentures 133.71 159.02 - On borrowing from banks 0.05 0.45 - Others 7.94 8.72

Other borrowing cost 4.44 2.88 Exchange differences to the extent considered as an adjustment to borrowing cost

5.14 1.36

151.28 172.43

28. earning per shareFor the year ended

march 31, 2012For the year ended

march 31, 2011Net profit for calculation of basic and diluted EPS (` in Cr.) 143.45 49.77 Total number of equity shares outstanding at the end of the year

81,189,303 81,189,303

Weighted average number of equity shares in calculating basic and diluted EPS

81,189,303 81,189,303

Basic and diluted eps (`) 17.67 6.13




29. the Group comprises of the following entities:The subsidiaries, associates and joint ventures considered in the consolidated financial statements are:

name of the Company Country of incorporation

percentage of ownership held as at

march 31, 2012

percentage of ownership held as at

march 31, 2011 subsidiariesDalmia Cement (Bharat) Limited (DCBL) India 85.01% 85.01%Kanika Investments Limited (KIL) India 100% 100%Dalmia Power Limited ( DPL) India 100% 100%subsidiaries of dalmia Cement (Bharat) limitedIshita Properties Limited (IPL) India 100% 100%Hemshila Properties Limited (HPL) India 100% 100%Geetee Estates Limited (GEL) India 100% 100%D.I. Properties Limited (DIPL) India 100% 100%Shri Rangam Properties Limited (SRPL) India 100% 100%Shri Radha Krishna Brokers & Holdings Limited (SRKBHL) India 100% 100%Arjuna Brokers & Minerals Limited (ABML) India 100% 100%Sri Shanmugha Mines & Minerals Limited (SHMML) India 100% 100%Sri Swaminatha Mines & Minerals Limited (SWMML) India 100% 100%Sri Subramanya Mines & Minerals Limited (SUMML) India 100% 100%Sri Trivikrama Mines & Properties Limited (STMPL) India 100% 100%Sri Dhandauthapani Mines & Minerals Limited (SDMML) India 100% 100%Sri Madhusudana Mines & Properties Limited (MMPL) India 100% 100%Dalmia Minerals & Properties Limited (DMPL) India 100% 100%Dalmia Cement Ventures Limited (DCVL) India 100% 100%step down subsidiaries of dalmia Cement (Bharat) limitedGolden Hills Resorts Private Limited (GHRPL) (subsidiary of Dalmia Cement Ventures Limited)

India 100% 100%

Rajputana Properties Private Limited (RPPL) (subsidiary of Dalmia Cement Ventures Limited)

India 100% 100%

Cosmos Cements Limited (CCL) (subsidiary of Dalmia Minerals & Properties Limited)

India 100% 100%

Sutnga Mines Private Limited (SMPL) (subsidiary of Dalmia Minerals & Properties Limited)

India 100% 100%

step down subsidiary of dalmia power limitedDCB Power Venture Limited (DCBPVL) # (subsidiary of Dalmia Power Limited)

India 100% 100%

associates of dalmia Cement (Bharat) limitedOCL India Limited (OCL) India 45.37% 45.37%Joint Venture of dalmia Cement (Bharat) limitedKhappa Coal Company Private Limited (KCCPL) India 36.73% 36.73%

# The share capital in DCB Power Venture Limited is held 74% by Dalmia Power Limited and 26% by Dalmia Cement (Bharat) Limited.

30. Contingent liabilities (not provided for) in respect of:

parent Company(` in Crore)

s. no. particulars 2011–12 2010–11a) Claims against the Company not acknowledged as debts 0.45 0.45




subsidiaries(` in Crore)

s. no. particulars 2011–12 2010–11a) Claims against the Company not acknowledged as debts 44.62 63.25b) Demand raised by following authorities in dispute:

Excise & Service tax 107.85 94.06Other tax matters 2.45 0.64

c) Guarantees/Counter Guarantees given to banks on account of guarantees issued by the banks to Bodies Corporate

4.00 4.00

total 158.92 161.95

Joint Venture(` in Crore)

s. no. particulars 2011–12 2010–11a) Bank Guarantee issued to Ministry of Coal 1.43 1.43

Based on favourable decisions in similar cases, legal opinion taken by the Group, discussions with the solicitors etc, the Group believes that there is a fair chance of favourable decisions in respect of the items listed above and hence no provision is considered necessary against the same.

31. Capital and other Commitment

(` in Crore)particulars 2011–12 2010–11

a) Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances)In respect of Parent 0.27 0.38In respect of Subsidiaries 145.63 110.55

b) Estimated amount of contracts remaining to be executed on other than capital account and not provided for (net of advances)In respect of Parent – –In respect of Subsidiaries – –

32. Remuneration paid to auditors (included in MiscellaneousExpenses) :

(` in Crore)particulars 2011–12 2010–11

statutory auditorsa) as an auditor

i) Statutory audit fee 0.24 0.23ii) Tax audit fee 0.06 0.01iii) Limited review 0.20 0.07

In other capacityi) Company law matter 0.01 -ii) Management Services - 0.04iii) Certification fee 0.02 0.02Reimbursement of expenses 0.11 0.04Cost auditora) Audit Fee 0.01 0.01b) For Expenses - -




33. In the opinion of the Board and to the best of their knowledge and belief, the value on realisation of loans, advances and current assets in the ordinary course of business will not be less than the amount at which they are stated in the Balance Sheet.

34. Goodwill in the Balance Sheet as per the details given below represents goodwill of subsidiaries. Such Goodwill had been tested for impairment by the management and no amortisation is required for the same.

(` in Crore)particulars 2011–12 2010–11subsidiariesGolden Hills Resorts Private Limited 3.95 3.95Rajputana Properties Private Limited 0.24 0.24Ishita Properties Limited 0.47 0.47Arjuna Brokers & Minerals Limited 0.01 0.01Sri Shanamugha Mines & Minerals Limited 0.01 0.01Dalmia Minerals & Properties Limited 0.10 0.10Dalmia Cement Ventures Limited 0.08 0.08Dalmia Power Limited 0.09 0.09DCB Power Venture Limited 17.09 17.09total 22.04 22.04

35. Operating Lease

assets taken on leaseThe group has entered into cancellable lease agreements with an average life of between one to five years with renewal option at the mutual consent of lessor & lessee. Some of the lease agreements contain escalation clause of upto 10%. There are no restrictions placed upon the group by entering into these leases.

(` in Crore)particulars 2011–12 2010–11Lease payments for the year 10.40 6.83total 10.40 6.83

assets given on leaseThe group has leased out building, plant and machinery etc on operating lease. In one of the leases, lease term is for 10 years and thereafter not renewable. There is no escalation clause in this lease agreement. There are no restrictions imposed by lease arrangements.

There are no uncollectible minimum lease payments receivable at the balance sheet date

(` in Crore)particulars 2011–12 2010–11Not later than one year 2.21 2.21Later than one year and not later than five years 4.31 6.52Later than five years – –total 6.52 8.73




36. Particulars of Forward Contracts outstanding and Unhedged Foreign Currency Exposure as at the Balance Sheet date:

Forward contract outstanding as at Balance Sheet date:

particulars Currency amount in Foreign Currency

amount (` in Cr.)

purpose

Buy Euro 47,900 0.32 To hedge the import creditors for Spare Parts.(739,961) (4.65)

total euro 47,900 0.32(739,961) (4.65)

Buy GBP 57,804 0.46 To hedge the import creditors for Spare Parts.(–) (–)

total GBp 57,804 0.46(–) (–)

Buy USD 918,000 4.60 To hedge the import creditors for capital goods.(–) (–)

Buy USD 14,464,800 72.08 To hedge the import creditors for Coal and spare parts.(10,926,210) (49.60)

Buy USD 36,949,536 192.60 To hedge the repayment of principal and interest foreign currency loans.(1,212,678) (5.64)

Buy USD 1,533,534 7.82 To hedge the import creditors for raw material.(1,399,489) (6.53)

total Usd 53,865,870 277.10(13,538,377) (61.77)

Particulars of unhedged foreign currency exposure:

(` in Crore)particulars amount in Foreign Currency amountForeign currency loans USD 15,110,511 (USD 12,427,915) 77.80

(Closing rate 1 USD =`51.49 (`44.77)) (55.64)Purchase of spare parts Nil (Euro 636,000) –

(Closing rate 1 Euro = N.A. (`63.1077)) (4.01)Purchase of Coal, Spare Parts. Nil (USD 4,098,000) –

(Closing rate 1 USD = ` N.A. (`44.77)) (18.35)Purchase of Raw Materials USD 1,331,081 (Nil) 6.79

(Closing rate 1 USD = `50.98 (-)) (–)

37. Gratuity and Other Post Employment Benefit Plans

GratuityThe Group has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with an insurance Group in the form of a qualifying insurance policy.

provident FundThe Group contributes provident fund liability to Dalmia Cement Provident Fund Trust. As per the Guidance Note on implementing AS 15, Employee Benefit (Revised 2005) issued by the Accounting Standards Board (ASB), provident funds set up by the employers, which require interest shortfall to be met by the employer, need to be treated as defined benefit plan.




During the current financial year, actuarial valuation for Provident Fund for the financial year 2011-12 was carried out in accordance with the Guidance Note issued by the Actuarial Society of India, and accordingly, the Group has provided shortfall in provident fund liability in the books. No actuarial valuation was carried out in the last year pending issuance of guidance note in this regard. Further, there was no shortfall in the provident fund liability ascertained by the Group in the last year. In view of this, comparative figures for last year have not been given.

The following tables summarise the components of net benefit expense recognised in the statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the plan.

Statement of Profit and Loss Net employee benefit expense (recognised in Employee Benefit Expenses)

(` in Crore)particulars Gratuity (Funded) pF trust (Funded)

2011–12 2010–11 2011–12Current Service Cost 1.61 1.34 1.22Interest cost on benefit obligation 0.91 – –Expected return on plan assets (1.29) – –Net actuarial (Gain)/ Loss recognised in the year 0.01 (1.01) –Net Benefit Expense 1.24 0.33 1.22Actual return on plan assets 1.29 0.96 –

Balance sheet


2011–12 2010–11 2011–12Present value of defined benefit obligation as at year-end 13.65 11.51 15.09Fair value of plan assets as at year-end 14.72 13.78 15.01Funded status {( Surplus/(Deficit)} 1.07 2.27 (0.08)net asset/(liability) as at year end 1.07 2.27 (0.08)

Changes in the present value of the defined benefit obligation are as follows:


2011–12 2010–11 2011–12Opening defined benefit obligation 11.51 – 14.69Contribution by plan participation / employees – – 0.86Acquisition adjustments – 10.25 –Current service cost 1.61 1.34 1.22Interest Cost 0.92 – 1.25Benefits paid out of funds (0.38) (0.03) (3.41)Actuarial (Gains)/ Losses on obligation (0.01) (0.05) (0.38)Settlements / Transfer in – – 0.86Closing defined benefit obligation 13.65 11.51 15.09




Changes in the fair value of plan assets are as follows:


2011–12 2010–11 2011–12Opening fair value of plan assets 13.78 – 14.34Contribution by plan participation / employees – – 0.86Expected return on plan assets 1.29 – 1.22Acquisition adjustments – 10.25 –Contribution by employer 0.03 2.60 1.22Benefits paid (0.38) (0.03) (3.41)Actuarial Gains/ (Losses) on obligation – 0.96 (0.08)Settlements / Transfer in – – 0.86Closing fair value of plan assets 14.72 13.78 15.01

The Group expects to contribute `1.18 Cr. (`1.30 Cr.) to gratuity in 2012-13.

the major categories of plan assets as a percentage of the fair value of total plan assets are as follows:

particulars Gratuity (Funded) pF trust (Funded)2011–12 2010–11 2011–12

Qualifying Insurance Policy 100% 100% –Govt. securities and financial securities as defined under Income Tax rules

– – 100%


The principal assumptions used in determining defined benefit plans for the Group are shown below:

particulars Gratuity (Funded) pF trust (Funded)2011–12 2010–11 2011–12

Discount Rate 8.00% 8.00% 8.00%Expected rate of return on assets 9.25% to 9.40% 9.15% –Mortality Table LIC (1994-96) duly

modifiedLIC (1994-96) duly

modifiedLIC (1994-96) duly

modifiedSalary Escalation 7.00% 7.00% –


Amounts in respect of defined benefit plans are as follows:


2011–12 2010–11 2011–12Defined benefit obligation 13.65 11.51 15.09Plan assets 14.72 13.78 15.01Surplus/ (Deficit) 1.07 2.27 (0.08)Experience adjustment on plan assets – 0.96 –Experience adjustment on plan liabilities 0.01 0.05 –




As AS-15 is applicable from the previous financial year the above disclosure as required under para 120(n) has been made prospectively from the date it became applicable on the Group.

provident and other fundsContribution to Defined Contribution Plans:

(` in Crore)particulars 2011–12 2010–11Provident Fund/Superannuation fund/ ESI/ Pension Scheme 5.08 4.78

38. The Company has recognised power and sales tax incentives atits at Kadappa unit, Andhra Pradesh under the Industrial Investment Promotion policy 2005-2010 issued by Government of Andhra Pradesh. Under the policy, the Company is entitled to a fixed power cost reimbursement upto `0.75 per unit of power consumed and 25% of Central Sales Tax and Value Added Tax paid in Andhra Pradesh. The Company has recognised the same as revenue grant as per Accounting Standard -12. The amounts recognised in Statement of Profit and Loss is as given below:-

(` in Crore)particulars 2011–12 2010–11Power incentive (netted from Power and Fuel in Note 26) 4.87 3.07Sales tax incentive (Other income in Note 22) 11.82 6.30total 16.69 9.37

39. The Company has debited direct expenses relating to limestone mining, captive power generation etc. to cost of raw material consumed, power& fuel and other accounts as under:

(` in Crore)particulars 2011–12 2010–11Consumption of stores and spare parts 40.17 32.29Rent 42.44 38.70Insurance 0.08 0.11Salary and Wages 3.04 2.75

85.73 73.85

Expenses as mentioned above are debited to following expenses account:

(` in Crore)particulars 2011–12 2010–11Cost of raw materials consumed 3.00 2.75Power and fuel 37.64 36.20Repair and maintenance to Plant & Machinery 39.82 31.59Branch selling expenses 5.20 3.30Repair and maintenance to building 0.07 –Misc. expenses – 0.01

85.73 73.85

40. Segment Information

primary segment: Business segmentThe Group’s operating businesses are organised and managed separately according to the nature of products manufactured and services provided. The identified reportable segments are Own Manufactured Cement, Refractory, Management Services and Others.

The “own manufactured Cement segment” includes manufacture and marketing of Cement.




The “Refractory segment” includes marketing of Refractory products.

The Group caters mainly to the needs of the domestic market. The export turnover is not significant in the context of total turnover. As such there are no reportable Geographical Segments.

segment informationThe following table presents segment revenues, results, assets & liabilities in accordance with AS-17 as on March 31, 2012.

(` in Crore)particulars segment Cement Refractory management

servicesothers total

RevenueGross Revenue 2,546.51 76.43 81.79 37.61 2,742.34

(1,898.76) (67.76) (66.80) (41.21) (2,074.53)Less: Inter/ Intra Segment Revenue – 5.65 76.12 35.40 117.17

(0.17) (5.56) (58.59) (41.21) (105.53)Less: Excise Duty 294.81 – – – 294.81

(223.07) (–) (–) (–) (223.07)Total Revenue 2,251.70 70.78 5.67 2.21 2,330.36

(1,675.52) (62.20) (8.21) (–) (1,745.93)ResultsSegment result 332.27 (1.39) 19.22 17.01 367.11

(183.30) (3.72) (12.49) (11.67) (211.18)Less: Financial Cost 151.28

(172.43)Add: Other unallocable income net of 54.57unallocable expenditure (32.65)Profit Before Tax 270.40

(71.40)Tax expense 122.85

(61.08)Share of profit in Associates 14.43

(51.93)Less: Minority Interest 18.53

(12.48)Profit after tax 143.45

(49.77)assets 3,720.29 45.31 170.90 315.60 4,252.10

(4,134.83) (44.75) (132.40) (359.20) (4,671.18)Non Segments assets 1,392.19

(853.70)total assets 5,644.29

(5,524.88)liabilities 326.65 23.57 15.69 24.14 390.05

(284.49) (13.98) (6.91) (36.57) (341.95)Non Segments liabilities 2,363.41

(2,405.24)total liabilities 2,753.46

(2,747.19)depreciation 160.41 – 1.29 20.03 181.73

(153.99) (–) (1.42) (19.87) (175.27)Capital expenditure 60.46 – 1.15 0.06 61.67

(119.75) (–) (0.81) (160.26) (280.82)




41. During the year, the Group has incurred some expenditure related to acquisition/construction of fixed assets and therefore accounted for the same under Capital work in progress. Details of the expenses capitalised and carried forward as capital work in progress are given below:

subsidiaries

(` in Crore)particulars 2011–12 2010–11Brought forward to current year as part of Capital Work in progress 69.38 51.25expenditure incurred during the yearEmployee benefitexpensesSalaries and Wages – 0.60other expensesRent 0.11 0.01Travelling 0.05 –Miscellaneous Expenses 2.90 5.56Finance CostInterestOn Borrowing from Banks 5.08 5.78Bank Charges 0.91 0.15Interest on fixed deposits reversed – 5.53income on sale of investments reversed (5.42) 0.48depreciation /amortisation 0.03 0.02total expenditure during the year 3.66 18.13Grand total 73.04 69.38Charged to statement of Profit & Loss 36.39 –Carried forward as part of Capital Work in progress 36.65 69.38

Joint Venture

(` in Crore)particulars 2011–12 2010–11Brought forward to current year as part of Capital Work in progress 4.83 4.70Employee benefit expensesSalaries and Wages 0.02 0.03Workmen and Staff Welfare expenses 0.01 0.03other expensesTravelling 0.08 0.07Miscellaneous Expenses – –total expenditure during the year 0.11 0.13Carried forward as part of Capital Work in progress 4.94 4.83

42. Related Party Disclosure as required by Accounting Standard-18.

a) List of related parties along with nature and volume of transactions is given below:

associate of the GroupOCL India Limited

Key management personnel of the GroupShri J. H. Dalmia – Managing Director, Shri Y. H. Dalmia – Managing Director, Shri Gautam Dalmia, Shri Puneet Yadu Dalmia.




Relatives of Key management personnelShri V. H. Dalmia (Brother of Managing Director), Shri J. H. Dalmia (HUF), Smt. Kavita Dalmia (Wife of Managing Director), Shri Y. H. Dalmia (HUF), Smt. Bela Dalmia (Wife of Managing Director), Shri Gautam Dalmia (HUF), Smt. Anupama Dalmia (Wife of Director), Smt. Avantika Dalmia (Wife of Director), Kumari Shrutipriya Dalmia (Daughter of Managing Director), Kumari Sukeshi Dalmia (Daughter of Director), Kumari Vaidehi Dalmia (Daughter of Director), Kumari Sumana Dalmia (Daughter of Director), Kumari Avanee Dalmia (Daughter of Director), Mst. Priyang Dalmia (Son of Director) Shri M. H. Dalmia, (Brother of Managing Director) Smt. Abha Dalmia (Wife of Brother of Managing Director), Shri R. H. Dalmia (Brother of Managing Director).

enterprises controlled by the Key management personnel of the GroupRama Investment Company Private Limited, Puneet Trading & Investment Company Private Limited, Kavita Trading & Investment Company Private Limited, Sita Investment Company Limited, Mayuka Investment Limited, Ankita Pratisthan Limited, Himgiri Commercial Limited, Valley Agro Industries Limited, Shri Nataraj Ceramic and Chemical Industries Limited, Shri Chamundeswari Minerals Limited, Shree Nirman Limited, Keshav Power Limited, Avanee and Ashni Securities Private Limited, ZipAhead.Com Limited, Alirox Abrasives Limited, Sukeshi Trust, Vaidehi Trust, Sumana Trust, Shrutipriya Dalmia Trust, Priyang Trust, Avanee Trust, Raghu Hari Dalmia Parivar Trust, Dalmia Sugar Ventures Limited, Himshikhar Investment Limited, Dalmia Solar Power Limited, Dalmia Bharat Sugar and Industries Limited, New Habitat Housing Finance and Development Limited.

b) The following transactions were carried out with the related parties in the ordinary course of business:

(` in Crore)nature of transaction associate Key

management personnel

Relatives of Key


Key management

personnel controlled

enterprises

total

Sale of goods and services 12.39 – – 6.42 18.81(29.40) (–) (–) (8.78) (38.18)

Reimbursement of expenses – Receivable 0.15 – – 4.54 4.69

(0.06) (–) (–) (3.38) (3.44)Reimbursement of expenses– Payable – – – 7.15 7.15

(–) (–) (–) (8.21) (8.21)Purchase of goods and services 0.42 – – 55.07 55.49

(–) (–) (–) (54.22) (54.22)Rent Receipt (including Lease Rent) – – – 2.21 2.21

(–) (–) (–) (2.28) (2.28)Interest Received – – – 3.97 3.97

(–) (–) (–) (1.77) (1.77)Refund of Security deposit – – – 6.66 6.66

(–) (–) (–) (6.66) (6.66)Receipt of fund on their behalf and transfer – – – – –

(–) (–) (–) (248.83) (248.83)Loans and advances given – – – 222.00 222.00

(–) (–) (–) (189.20) (189.20)Loans and advances received back – – – 197.00 197.00

(–) (–) (–) (164.20) (164.20)Purchase of Fixed Assets – – – 0.11 0.11

(–) (–) (–) (1.34) (1.34)Sale of Fixed Assets – – – 0.01 0.01

(0.42) (–) (–) (0.24) (0.66)






Relatives of Key


Key management


enterprises

total

Fixed Deposit received – 0.13 0.04 – 0.17(–) (–) (3.60) (0.99) (4.59)

Interest paid on Fixed Deposit – 0.03 0.96 0.03 1.02(–) (–) (2.08) (0.09) (2.17)

1. Sale of goods and services includes transaction with OCL India Limited `12.39 Cr. (Previous Year `29.40 Cr.), Dalmia Bharat Sugar and Industries Limited `5.75 Cr. (Previous Year `5.48 Cr.).

2. Reimbursement of expenses – receivable includes transaction with Shri Nataraj Ceramic and Chemical Industries Limited `4.24Cr. (Previous Year `3.38 Cr.).

3. Reimbursement of expenses – payable includes transaction with Dalmia Bharat Sugar and Industries Limited `0.19 Cr. (Previous Year ̀ 1.54 Cr.), Shri Nataraj Ceramic and Chemical Industries Limited ̀ 6.96 Cr. (Previous Year `6.67 Cr.).

4. Purchase of goods and services includes transaction with Keshav Power Limited `24.72 Cr. (Previous Year `28.32 Cr.), Shri Nataraj Ceramic and Chemical Industries Limited `27.96 Cr.. (Previous Year `21.83 Cr.).

5. Rent receipt (includes Lease Rent) includes transaction with Keshav Power Limited `2.21 Cr. (Previous Year `2.21 Cr.).

6. Interest received includes transaction with Dalmia Bharat Sugar and Industries Limited `3.97 Cr. (Previous Year `1.77 Cr.).

7. Refund of security deposit includes transaction with Keshav Power Limited `6.66 Cr. (Previous Year `6.66 Cr.).

8. Receipt of fund on their behalf and transfer includes transaction with Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `248.83 Cr.).

9. Loan and advances given includes transaction with Dalmia Bharat Sugar and Industries Limited `222.00 Cr. (Previous Year `189.20 Cr.).

10. Loan and advances received back given includes transaction with Dalmia Bharat Sugar and Industries Limited `197.00 Cr. (Previous Year `164.20 Cr.).

11. Purchase of fixed assets includes transaction with Himshikar Investment Limited `0.10 Cr. (Previous Year `1.13 Cr.), Dalmia Solar Power Ltd Nil (Previous Year `0.21 Cr.).

12. Sale of Fixed Assets includes transaction with OCL India Limited Nil (previous Year `0.42 Cr.), Dalmia Bharat Sugar and Industries Limited `0.01 Cr. (Previous Year `0.24 Cr.).

13. Fixed Deposit Received includes transaction with Shri T. Venkatesan (Director of Subsidiary Co.) `0.13 Cr. (Previous Year Nil), Smt. Kala Venkatesan (Wife of Director of Subsidiary Co.) `0.04 Cr. (Previous Year Nil), Shri Vishnu Hari Dalmia Nil (Previous Year `3.60 Cr.).




c) Balances outstanding at year end:



Relatives of Key


Key management


enterprises

total

Fixed Deposits – 0.29 0.04 – 0.33(–) (16.10) (–) (0.99) (17.09)

Loan Receivable – – – 50.00 50.00(–) (–) (–) (25.00) (25.00)

Amounts receivable 0.28 – – 2.16 2.44(0.91) (–) (–) (31.21) (32.12)

Amounts payable – – – 23.79 23.79(–) (–) (–) (33.00) (33.00)

Security deposit receivable – – – 1.25 1.25(–) (–) (–) (1.25) (1.25)

1. Fixed Deposits includes Sh. N. Gopalaswamy (Director of Subsidiary Co.) `0.16 Cr. (Previous Year Nil), Sh. T. Venkatesan (Director of Subsidary Co.) ̀ 0.13 Cr. (Previous Year Nil), Smt. Kala Venkatesan (Wife of Director of Subsidiary Co.) `0.04 Cr. (Previous Year Nil), Sh. Vishnu Hari Dalmia Nil (Previous Year `3.60 Cr.), Sh. Raghu Hari Dalmia Nil (Previous Year `12.50 Cr.).

2. Loan receivable includes Dalmia Bharat Sugar and Industries Limited `50.00 Cr. (Previous Year `25.00 Cr.).

3. Amount receivable includes OCL India Limited `0.28 Cr. (Previous `0.91 Cr), Dalmia Bharat Sugar and Industries Limited `0.01 Cr. (Previous Year `29.09 Cr.), Shri Nataraj Ceramic and Chemical Industries Limited `0.05 Cr. (Previous Year Nil), Dalmia Solar Power Limited `2.10 Cr. (Previous Year `2.10 Cr.).

4. Amount Payable includes Keshav Power Limited `22.56 Cr. (Previous Year `27.60 Cr.), Dalmia Bharat Sugar and Industries Limited `0.34 Cr. (Previous Year `2.72 Cr.), Shri Nataraj Ceramic and Chemical Industries Limited `0.80 Cr. (Previous Year `2.68 Cr.).

5. Security deposit receivable includes Shri Nataraj Ceramic and Chemical Industries Limited `1.25 Cr. (Previous Year `1.25 Cr.).

43. Details of the Group’s share in Joint Ventures included in the Consolidated Financial Statement are as follows:

(` in Crore)particulars 2011–12 2010–11soURCes oF FUndsShareholders Fund – –Reserves & Surplus – –non Current liabilitiesOther long term liabilities – –Current liabilitiesOther current liabilities 0.01 0.01Short term provision 0.02 0.01total 0.03 0.02




(` in Crore)particulars 2011–12 2010–11appliCation oF assetsnon Current assetsTangible fixed assets 0.62 0.02Capital Work in Progress 4.94 4.82Long Term loans and advances 0.06 0.04total 5.62 4.88Current assetsCash & Cash equivalents 0.47 0.95Short term Loans & Advances 0.06 0.06total 0.53 1.01

44. Details of loans and advances to associates, parties in which Directors are interested and Investments by the Loanee in the shares of the Group (as required by clause 32 of listing agreement)

(` in Crore)particulars outstanding

amount as atmaximum

amount outstanding

during financial year

outstanding amount as at

maximum amount

outstanding during financial

year2011-12 2011-12 2010-11 2010-11

Loans and Advances to Associates- OCL India Limited 0.28 2.16 0.91 8.69

45. Dalmia Cement (Bharat) Ltd. (DCBL), subsidiary of the Company has entered into definitive agreements with Calcom Cement India Limited (‘Calcom’), Saroj Sunrise Private Limited (‘SSPL’) (a Company owned by the promoters of Calcom) and the promoters of Calcom whereby the Company has initially acquired 14.59% and would be ultimately acquiring 50% stake in the Equity Share Capital of Calcom. The agreements also provide for board representation and assignment of voting rights to the extent of 50% to the Company till the ultimate shareholding of 50% is acquired. A part of the agreements has already been executed whereby DCBL has invested an amount of `27.93 Cr. and `59.00 Cr. respectively in the Equity Shares of Calcom and Optionally Redeemable Convertible Debentures (‘OCDs’) of SSPL. Subsequently, Calcom has been restrained by an interim order passed by the Hon’ble High Court of Calcutta on a petition filed by Guarant Co Limited, among other things, to make any change in its ownership, control, management of the business and Memorandum and Articles. In view of the said order the above arrangement is not binding upon Calcom Cement India Limited.

The OCDs are non interest bearing and are secured by the pledge of 108,705,790 equity shares of Calcom held by SSPL. If certain conditions for performance by promoters of Calcom are met, these OCDs are convertible into equity shares constituting 0.01% shareholding of SSPL, else DCBL has an option either to get the debentures redeemed for an aggregate amount of `59.00 Crore or convert into equity shares constituting 99.99% shareholding of SSPL.

This being a long term strategic investment acquired in the current year at fair market value, in the opinion of the management, no provision for diminution in value of investment is required to be made as per Accounting Standard 13, “Accounting for Investments” notified under the Companies (Accounting Standards) Rules 2006 (as amended).

46. In the opinion of the management there is no reduction in value of any assets, hence no provisions is required in terms of Accounting Standard 28 “Impairment of Assets”.








47. previous Year ComparativesTill the year ended March 31, 2011, the group was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the group. The group has reclassified previous year figures to confirm to this year’s classification



Consolidated Cash Flow statement for the year ended march 31, 2012

(` in Crore)2011–2012 2010–2011

a. Cash Flow from operating activitiesNet Profit before tax 270.40 71.40 AdjustmentsShare of Profit in Associates 14.43 51.93 Depreciation / Amortisation 181.73 175.31 Provision for doubtful debts/ advances 0.22 5.43 Bad Debts/ Advances written off 0.28 2.30 Dividend Income (12.88) (0.56)Finance Cost 151.28 172.43 Interest Income (16.01) (11.46)(Profit)/Loss on sale of Investments (25.68) (20.63)Assets Written off / Loss on Sale of Fixed Assets 5.30 3.12 Operating Profit before working Capital Changes 569.07 449.27 adjustments for working Capital changes :Inventories 36.17 (87.37)Trade and Other Payables 36.66 2.40 Trade and Other Receivables (141.67) (113.14)Cash Generated from operations 500.23 251.16 Direct Taxes Paid (93.75) (18.29)net Cash from operating activities 406.48 232.87

B. Cash Flow from investing activitiesPurchase of fixed Assets (61.50) (21.61)Proceeds from sale of Fixed Assets 11.70 3.69 (Purchase)/ Sale of Current Investments (net) (212.66) 20.36 (Purchase) of Non Current Investments (295.98) – Interest Received 14.46 11.46 Dividend Received from Current Investments 12.88 0.56 net Cash used in investing activities (531.10) 14.46

C. Cash used from Financing activitiesProceeds / (repayment) of Short term Borrowings 190.76 (27.09)(Repayment) of Long term Borrowings (291.36) (190.18)Proceeds from issue of shares (net of expenses) – 496.62 Finance Cost (151.14) (166.43)Dividend Paid (9.94) –Corporate Dividend tax paid (1.65) – Net cash from / (used in) financing activities (263.33) 112.92 net increase in Cash and Cash equivalents (a+B+C) (387.95) 360.25 Cash and Cash equivalents (opening Balance) 454.32 0.06 Cash additions pursuant to scheme of arrangement – 94.01 Cash and Cash equivalents (Closing Balance) 66.37 454.32 Change in Cash and Cash equivalents (387.95) 360.25

Note: 1) Cash and Cash Equivalents components are as per Note 18. 2) Previous year figures have been regrouped/restated whereever considered necessary As per our report of even dateFor s. s. Kothari metha & Co. For and on behalf of Board of DirectorsChartered Accountants of dalmia Bharat enterprises limitedFirm Registration No. 000756Nper arun K. tulsian nidhi Bisaria Vipin agarwal puneet Yadu dalmia Y. h. dalmiaPartner Company Secretary Executive Director Director Managing DirectorMembership No. 089907 (Finance)Place : New DelhiDate : May 18, 2012



statement attaChed to BalanCe sheet as at maRCh 31, 2012 pURsUant to seCtion 212 oF the Companies aCt, 1956

subsidiary Companies dalmia Cement

( Bharat) limited

Kanika investment

limited

dalmia power limited

d.i. properties limited

shri Rangam properties

limited

1. Financial year ending 31-03-2012 31-03-2012 31-03-2012 31-03-2012 31-03-20122. Date from which it became a subsidiary 01-04-2010 01-04-2010 01-04-2010 01-04-2010 01-04-20103. Holding Company’s interest in the share capital 85.01% 100% 100% 100% 100%4. The net aggregate amount of the subsidiary’s profits

less losses, so far as it concerns the members of the Holding Company and is not dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012(`) 1,54,28,08,055 (-) 3,76,922 (-) 5,09,212 2,38,612 46,535(b) For the previous financial years since it became Company’s Subsidiary (`)

(-)362,07,879 13,73,159 (-) 1,89,833 (-)17,586 (-)20,464

5. The net aggregate amount of the subsidiary’s profits less losses, so far these profits are dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012(`) Nil Nil Nil Nil Nil(b) For the previous financial years since it became Company’s Subsidiary (`)

Nil Nil Nil Nil Nil

subsidiary Companies arjuna Brokers &

minerals limited

dalmia minerals & properties

limited

shri Radha Krishna

Brokers & holdings

limited

sri shanmugha

mines & minerals limited

sri subramanya


1. Financial year ending 31-03-2012 31-03-2012 31-03-2012 31-03-2012 31-03-20122. Date from which it became a subsidiary 01-04-2010 01-04-2010 01-04-2010 01-04-2010 01-04-20103. Holding Company’s interest in the share capital 100% 100% 100% 100% 100%4. The net aggregate amount of the subsidiary’s profits

less losses, so far as it concerns the members of the Holding Company and is not dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012(`) 3,56,927 (-) 19,324 (-) 2,968 231 (-) 18,558(b) For the previous financial years since it became Company’s Subsidiary (`)

(-) 3,075 (-) 16,225 (-)18,400 1,96,795 (-)15,353

5. The net aggregate amount of the subsidiary’s profits less losses, so far these profits are dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012(`) Nil Nil Nil Nil Nil(b) For the previous financial years since it became Company’s Subsidiary (`)

Nil Nil Nil Nil Nil



subsidiary Companies ishita properties

limited

hemshila properties

limited

Geetee estates limited

sri swaminatha


sri trivikrama mines &

properties limited


less losses, so far as it concerns the members of the Holding Company and is not dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012 (`) 1,27,048 4,476 1,65,224 24,467 (-) 7,482(b) For the previous financial years since it became Company’s Subsidiary (`)

(-) 4,24,97,188 (-)16,322 (-)33,805 (-)14,453 (-)11,021

5. The net aggregate amount of the subsidiary’s profits less losses, so far these profits are dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012 (`) Nil Nil Nil Nil Nil(b) For the previous financial years since it became Company’s Subsidiary (`)

Nil Nil Nil Nil Nil

subsidiary Companies sri madhusudana

mines & properties

limited

sri dhandautha-

pani mines & minerals

limited

dalmia Cement

Ventures limited

Golden hills Resort private

limited

Rajputana properties

private limited


less losses, so far as it concerns the members of the Holding Company and is not dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012 (`) 87,317 22,489 (-)36,89,67,968 Nil Nil(b) For the previous financial years since it became Company’s Subsidiary (`)

(-)37,250 (-)6,271 4,24,874 Nil Nil

5. The net aggregate amount of the subsidiary’s profits less losses, so far these profits are dealt with in the Holding Company’s accounts:

(a) For the year ended 31-03-2012 (`) Nil Nil Nil Nil Nil(b) For the previous financial years since it became Company’s Subsidiary (`)

Nil Nil Nil Nil Nil




subsidiary Companies dCB power Ventures limited

sutnga mines private limited

Cosmos Cements limited

1. Financial year ending 31-03-2012 31-03-2012 31-03-20122. Date from which it became a subsidiary 01-04-2010 01-04-2010 01-04-20103. Holding Company’s interest in the share capital 100% 100% 100%4. The net aggregate amount of the subsidiary’s profits less

losses, so far as it concerns the members of the Holding Company and is not dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012(`) 8,12,64,250 (-)5,61,930 (-)61,576(b) For the previous financial years since it became Company’s Subsidiary (`)

69,541,672 13,294 (-)60,318

5. The net aggregate amount of the subsidiary’s profits less losses, so far these profits are dealt with in the Holding Company’s accounts:(a) For the year ended 31-03-2012(`) Nil Nil Nil(b) For the previous financial years since it became Company’s Subsidiary (`)

Nil Nil Nil

Place : New Delhi puneet Yadu dalmia Y. h. dalmiaDated: May 18, 2012 Director Managing Director




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138 Dalmia Cement (Bharat) Limited

Dalmia cement (bharat) limiteD

Financial Highlights Corporate Governance


The Directors have pleasure in presenting the Sixteenth Annual Report and Audited Statements of Account of the Company for the year ended March 31, 2012.

Financial results(` in Crore)

FY12 FY11net sales turnover 2251.70 1675.69Profit before interest, depreciation and tax (EBITDA)

567.73 364.17

Less: Interest 150.96 171.15Profit before depreciation and tax (PbDt)

416.77 193.02

Less: Depreciation 160.41 153.98Profit before tax (PBT) 256.36 39.04Provision for current tax 71.01 0.70Provision for deferred tax 31.34 41.96Prior year tax written back -0.26 –Profit/(Loss) after tax (PAT) 154.47 -3.62Add: (i) Surplus brought forward 0.83 4.24 (ii) Transfer from Debenture Redemption Reserve – 10.00Profit available for appropriation 155.10 10.62aPPrOPriatiOns:General Reserve – –Debenture Redemption Reserve (net) 9.79 9.79Interim/Proposed Dividend 13.91 –Dividend Distribution tax thereon 2.26 –Balance carried forward 129.14 0.83

155.10 10.62

DiViDenDYour Directors are pleased to announce declaration of a maiden dividend of `0.55 per equity share of `10/- each.

business PerFOrmanceThe future of global economy continues to be uncertain. The economic recovery of the United States, in the absence of any signs of secular growth trends appear to be fragile. With the political developments in Greece and France, the situation in Europe has become fluid. Sustaining the recovery over the long term will be a challenge, as per World Economic Outlook released by the International Monetary Fund (IMF) in mid-April 2012.

Global growth is projected to drop from about 4% in 2011 to about 3.5 % in 2012. However, unless clarity emerges about the future of Euro and European economy, any projection of the global growth for the year 2013 or thereafter will remain suspect.

India, considered as the engine of Asian economic growth, has also been adversely impacted by a combination of high inflation, tight monetary policy, high current account deficit, falling rupee, weak global economic conditions and near paralysis of the country’s fiscal policies and reforms. The tight monetary policy raised borrowing costs, which had a cascading impact of weakening investment and dampening business sentiment, resulting in high volatility of capital flows. The year also witnessed Indian industries struggle with fall in export demand and volatility of commodity prices (and fear of even higher crude prices due to heightened geopolitical uncertainty). The recent April Mid-Policy Review announcement of the first cut in rates by the Reserve Bank of India in three years provided some albeit short lived cheer to the industry and may not lift overall business sentiment and help in stimulating investment as the interest rates have actually not come down.

In this backdrop, India’s economic growth is expected to be about 6.9% in FY12, while it is expected to clock a 7.1% rate for FY 13. IMF more optimistic projections about India’s growth at 7.3% has proffered.

FY12 FY11 FY10cement DiVisiOn ('000 mt)Clinker Production 4288 3533 3335Cement Production 5380 4666 4074Cement Sales and Self Consumption

5392 4617 4064

* Figures for FY – 10 relate to the operations of the cement division of Dalmia Bharat Sugar and Industries Limited which was demerged into the Company.

Following two consecutive years of sluggish demand, more meaningful demand growth of 9-10% is expected in the future. Infrastructure spends are expected to improve during the calendar year 2012 , as it is the 1st year of the 12th Five-Year Plan, when typically, 15% of the Plan expenditure is likely to be spent. Housing is expected to be the biggest demand driver for cement. Normally, the run-up to an election perks up a region’s government spending and, in turn, its cement demand. Elections are slated in Gujarat (December 12), Karnataka (May 13), while Andhra Pradesh is expected to hold elections in the next 12-24 months and the next general elections are slated by 2014. A stable political environment will play an important role in shaping the industry’s growth in the coming year.

The 12th Five-Year Plan target envisages infrastructure spending of $1 trillion, in which several mega road and railway projects are planned. The large outlays have also been matched with greater government focus on facilitating

Directors’ Report FoR ThE yEAR EnDED MARch 31, 2012




long-term funding and private sector participation, which will provide a growth impetus to the sector. As India embarks on this massive infrastructure capex, the cement industry will also be a beneficiary of the derivative demand.

Urban housing too will generate better demand, with increasing affordability and the potential of slow return to a softer interest rate cycle. Rural housing and construction activity is also expected to pick up. Cement demand from the unorganised housing segment is thus on the growth trajectory and is expected to further expand by approximately 7% per annum in the next three years.

inVestment in calcOm cement inDia limiteDDuring the year under review the Company entered into definitive agreements with Calcom Cement India Limited, its affiliates and the Bawri Group for making strategic investment in Calcom Cement India Limited. The Company has agreed to acquire 50% of the share capital of Calcom Cement India Limited. Calcom Cement India Limited is entitled to various fiscal benefits under the North East Industrial and Investment Promotion Policy, 2007, which is likely to be substantial. With this investment the Company will be the first reputed mainland player to have a presence in the North-East, which is a fast growing region.

inDustrial relatiOns The industrial relations during the year under review remained harmonious and cordial. The Directors wish to place on record their appreciation for the excellent cooperation received from all employees at all levels in various units of the Company.

EMPLoyEES’ PARTIcULARSThe statement giving particulars of employees who were in receipt of remuneration in excess of the limits prescribed under Section 217(2A) of the Companies Act, 1956 read with the Rules and Notifications made thereunder, is annexed. However, in terms of the proviso (b)(iv) to Section 219(1) of the Companies Act, 1956 the Report and Accounts are being sent to the Members excluding the aforesaid Annexure. Any Member interested in obtaining copy of the same may write to the Company Secretary at the Registered Office.

EnERGy conSERVATIon, TEchnoLoGy ABSoRPTIon anD FOreiGn eXchanGe transactiOnsA statement giving details of Conservation of Energy, Technology Absorption and Foreign Exchange transactions, in accordance with the Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988, forms a part of this report as Annexure – B.

subsiDiariesThe Directors’ Report and audited accounts of the Company’s Subsidiaries, Ishita Properties Limited, Shri Rangam Properties Limited, Geetee Estates Limited, D. I. Properties Limited, Hemshila Properties Limited, Arjuna Brokers & Minerals Limited, Shri Radha Krishna Brokers & Holdings Limited, Dalmia Minerals & Properties Limited, Sri Subramanya Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited, Sri Shanmugha Mines & Minerals Limited, Sri Dhandauthapani Mines and Minerals Limited, Sri Trivikrama Mines and Properties Limited, Sri Madhusudhana Mines and Properties Limited, Dalmia Cement Ventures Limited and its ultimate Subsidiaries Cosmos Cements Limited, Sutnga Mines Private Limited, Rajputana Properties Private Limited and Golden Hills Resort Private Limited for the year ended March 31, 2012 are attached.

FiXeD DePOsitsThe total amount of deposits remaining due for payment and not claimed by the depositors as on March 31, 2012 was `0.08 Crore in respect of 12 depositors. None of the depositors have approached the Company for renewal/repayment of deposits till date.

DirectOrsMr. Rajeev Gupta, was co-opted as an Additional Director of the Company in the Meeting held on August 8, 2011 and holds office as a Director of the Company till the conclusion of the ensuing Annual General Meeting. The Company has received Notice from a Shareholder together with requisite deposit as required under the provisions of section 257 of the Companies Act, 1956 to the effect that he intends to propose the name of the said persons for being appointed as a Director of the Company.

The appointment of Mr. T. Venkatesan as Deputy Managing Director was also approved by the Board of Directors of the Company in the meeting held on August 8, 2011.

Mr. Sanjay Nayar and Mr. Jai Hari Dalmia, being the Directors longest in office retire by rotation at the forthcoming General Meeting of the Company and offer themselves for re-appointment.

All the above named Directors have confirmed that they are not disqualified from being appointed/re-appointed as Directors of the Company in terms of the provisions of Section 274(1)(g) of the Companies Act, 1956.



DirectOrs resPOnsibilitY statementIn terms of the provisions of Section 217(2AA) of the Companies Act, 1956 your Directors declare that:

(a) in the preparation of the annual accounts, the applicable Accounting Standards have been followed and no departures have been made there from;

(b) the Directors had selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

(c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; and

(d) the Directors had prepared the annual accounts on a going concern basis.

auDitOrsM/s. S. R. Batliboi & Co., Chartered Accountants and M/s. S. S. Kothari Mehta & Co., Chartered Accountants, the

Joint Auditors of the Company retire at the conclusion of the ensuing Annual General Meeting and are eligible for re-appointment. As required under Section 224 of the Companies Act, 1956, the Company has obtained from both of them a certificate to the effect that their re-appointment, if made, would be in conformity with the limits prescribed in the said Section.

cOst auDitOrsM/s. R. J. Goel & Co., Cost Accountants, were appointed as the Cost Auditors of the Company to conduct cost audit of the cement manufacturing units for the year ended March 31, 2011, and they have submitted the Cost Audit Reports for the said year on August 8, 2011. The said firm has been appointed as Cost Auditors to conduct cost audit of the cement manufacturing units and power generaition units for the year ended March 31, 2012.

For and on behalf of the Board

Place : New Delhi Dated : May 16, 2012 Chairman




PARTIcULARS WITh RESPEcT To conSERVATIon oF EnERGy, TEchnoLoGy ABSoRPTIon AnD FoREIGn eXchanGe OutGO anD earninGs

a. cOnserVatiOn OF enerGY(a) Energy Conservation measures taken:

(i) Liquid waste/ municipal waste/spent carbon used as alternate fuels.

(ii) Time delay interlock for Reverse Air Bag House Raw Mill Fan and GRR Cooling Fan to reduce power consumption.

(iii) Optimisation of Compressed Air usage in Bag Filters and Air Blasters.

(iv) Installation of Slip Power Recovery System.

(v) Expert optimiser implemented for Raw Mill, Cement Mill and Coal Mill.

(vi) Auto stop logic built for Conveyors to avoid idle running hours.

(vii) Kiln inlet modification done so as to save fuel consumption.

(b) Additional investments and proposals, if any, being implemented for reduction of consumption of energy:

(i) Reduction of Belt Conveyor speed at Coal Crusher.

(ii) High efficiency Fan for Raw Mill.

(iii) Alternate Fuel firing system to reduce the coal consumption.

(c) Impact of measures taken already and proposed vide (a) and (b) above are aimed at:

Enabling the Company to save electrical energy and thermal energy by about 2% as compared to previous levels.

(d) Total energy consumption and consumption per unit of production as per Form “A” attached.

b. technOlOGY absOrPtiOnEfforts made in technology absorption as per Form “B” attached.

c. FOreiGn eXchanGe earninGs anD OutGO(a) Activities relating to exports; initiatives taken to increase exports; development of new export markets for products and

services, and export plans:

(i) Cement was exported during the year.

(b) Total foreign exchange used and earned during the year:

(i) Used: ` 433.46 Crore

(ii) Earned: ` 1.95 Crore

Annexure – B



FoRM ‘A’

(FOrm OF DisclOsure OF Particulars with resPect tO cOnserVatiOn OF enerGY)

2011-12 2010-11a. POwer anD Fuel cOnsumPtiOn 1. electricitY: a) Purchased: Units (KWH in million) 112.47 85.56 Total Amount (` Crore) 485.95 394.66 Rate/Unit (`) 4.32 4.61 b) Own Generation: i) Through Captive Thermal Power Plant Units (KWH in million) 288.58 265.09 Total Amount (` Crore) 1956.63 1441.84 Rate/Unit (`) 6.78 5.44 ii) Through Diesel Generator: Units (KWH in million) 3.29 1.86 KWH per Litre of HSD/FO 3.48 3.56 Rate/Unit (`) 9.88 7.802. coAL-SLAcK/STEAM – GRADES B To E, LIGnITE AnD coKE BREEZE Quantity (‘000 MT) 771 728 Total Cost (` Crore) 6201.64 4350.45 Average Rate (` / MT) 8043.63 5979.223. Furnace Oil incluDinG (lshs & hsD) Quantity (KL) 1712 2799 Total Amount ( ` Crore) 69.04 94.10 Average Rate (` / KL) 40327 33613b. cOnsumPtiOn Per unit OF PrODuctiOn: PRODUCT CEMENT Standard If any Current Year Previous Year Electricity (Units/MT) 73 76 Furnace Oil (including LSHS) (Litres/MT) 0.29 0.46 Coal (Kgs. / MT) 97 102




FoRM ‘B’

(FOrm OF DisclOsure OF Particulars with resPect tO absOrPtiOn)

research anD DeVelOPment (r&D)1. Specific areas in which R&D is carried out by the company:

(a) FLS Cooler drive split into three drives.

(b) Conversion of VRM 1 as Fly Ash drier.

(c) Laser Sensor replaced with Proximity in HPMP 2 at Robo Lab.

2. Benefits derived as a result of the above R&D:

Better control over process and cycle time reduction.

Compensated shortfall of dry fly ash to maintain PPC production.

3. Future plans of action:

(a) Increased usage of alternate fuels.

(b) Limestone screening plant to reduce rejections.

4. Expenditure on R&D: (` million)(a) Capital

(b) Recurring

(c) Contribution/Expenditure on Research and Development —

(d) Total

(e) Total R&D Expenditure as a percentage of turnover Above excludes material and other costs.

TEchnoLoGy ABSoRPTIon, ADAPTATIon AnD InnoVATIon1. Efforts in brief, made towards technology absorption, adaptation and innovation:

nOne

2. Benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc.:

nil

3. No technology has been imported for the last five years.



Financial



Auditors’ Report

to The Members of Dalmia cement (Bharat) Limited 1. We have audited the attached Balance Sheet of Dalmia

Cement (Bharat) Limited (‘the Company’) as at March 31, 2012 and also the Statement of Profit and Loss and the Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditors’ Report) Order, 2003 (as amended) (the Order) issued by the Central Government of India in terms of sub-section (4A) of Section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to above, we report that:

i. We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purposes of our audit;

ii. In our opinion, proper books of account as required by law have been kept by the Company so far as appears from our examination of those books;

iii. The Balance Sheet, Statement of Profit and Loss and Cash Flow statement dealt with by this report are in agreement with the books of accounts;

iv. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956;

v. On the basis of the written representations received from the directors, as on March 31, 2012, and taken on record by the Board of Directors, we report that none of the directors is disqualified as on March 31, 2012 from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956;

vi. In our opinion and to the best of our information and according to the explanations given to us, the said accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2012;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

For S. R. Batliboi & co. For S. S. Kothari Mehta & co. Firm Registration no.: 301003E Firm Registration no.: 000756nchartered Accountants chartered Accountants

per Manoj Gupta per Arun K. TulsianPartner PartnerMembership No.: 83906 Membership No.: 89907Place: Gurgaon Place: New DelhiDate: May 16, 2012 Date: May 16, 2012



Re: Dalmia Cements (Bharat) Limited (‘the Company’)

(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.

(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.

(c) There was no disposal of a substantial part of fixed assets during the year.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable. Inventories lying with outside parties have been confirmed by them as at year end.

(b) The procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on physical verification of inventory as compared to books of account were not material and have been properly dealt with in the books of account.

(iii) (a) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to companies, firms or other parties covered in the register maintained under section 301 of the Companies Act, 1956. Accordingly, the provisions of clause 4(iii) (a) to (d) of the Order are not applicable to the Company and hence not commented upon.

(e) The Company had taken unsecured loans in the form of fixed deposits from two directors covered in the register maintained under section 301 of the Companies Act, 1956. The maximum amount involved during the year is `0.34 Crore and the year-end balance of loans taken from such parties is `0.29 Crore.

(f) In our opinion and according to the information and explanations given to us, the rate of interest and other terms and conditions for such loans are not, prima facie, prejudicial to the interest of the Company.

(g) In respect of loans taken, repayment of the principal amount is as stipulated and payment of interest has been regular.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the Company and the nature of its business, for the purchase of inventory and fixed assets and for the sale of goods. The activities of the Company do not involve rendering of services. During the course of our audit, we have not observed any major weakness or continuing failure to correct any major weakness in the internal control system of the Company in respect of these areas.

(v) (a) According to the information and explanations provided by the management, we are of the opinion that the particulars of contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered into the register maintained under section 301 have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of such contracts or arrangements exceeding value of ` Five Lakh in respect of each party have been entered into during the financial year at prices which are reasonable having regard to the prevailing market prices at the relevant time.

(vi) In respect of deposits accepted, in our opinion and according to the information and explanations given to us, directives issued by the Reserve Bank of India and the provisions of sections 58A, 58AA or any other relevant provisions of the Companies Act, 1956, and the Rules framed there under, to the extent applicable, have been complied with. We are informed by the management that no order has been passed by the Company Law Board, National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

(vii) In our opinion, the Company has an internal audit system commensurate with the size of the Company and nature of its business.

(viii) We have broadly reviewed the books of account

Annexure referred to in paragraph 3 of our report of even date



maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 209(1)(d) of the Companies Act, 1956, related to the manufacture of Cement and Power, and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained.

(ix) (a) Undisputed statutory dues including provident fund, investor education and protection fund, employees’ state insurance, income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty, cess and other material statutory dues have generally been regularly deposited during the year with the appropriate authorities though there has been a slight delay in a few cases.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, investor education and protection fund, employees’ state insurance, income-tax, wealth-tax, service tax, sales-tax, customs duty, excise duty, cess and other undisputed statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.

(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, customs duty, excise duty and cess on account of any dispute, are as follows:

name of the statute nature of dues Amount (` crore)

Period to which the amount relates

Forum where dispute is pending

Central Excise Act, 1944 Demand of excise duty on the clinker content of the cement removed to SEZ without payment of duty

12.24

Jul. 2006 to Mar. 2012

CESTAT, Chennai

Central Excise Act, 1944 Denial of credit on MS plates, steel and angles etc. used in civil structure and immovable property

4.87

Apr. 2004 to Apr. 2006

CESTAT, Chennai

Finance Act, 1994 Service tax credit on Outdoor catering 0.04

Apr. 2006 to May 2007

CESTAT Chennai

Finance Act, 1994 Service tax on Consulting Engineer Services 1.01 2006 CESTAT ChennaiTamil Nadu Sales Tax Act Sales tax on packing charges 0.18 1983-84 High Court

MadrasCentral Excise Act, 1944 Disallowance of Cenvat credit on cement, TMT bar

etc used in construction of factory

10.72 2009-10 and 2010-11

CESTAT, Delhi

Central Excise Act, 1944 Denial of cenvat credit availed on Steel items, such as plates, angles, channels, welding electrodes used in the fabrication of Capital goods.

0.05

Jul. 2010 to Dec. 2010

Commissioner Appeals, Trichy

Central Excise Act, 1944 Disallowance of credit taken on Inputs, capital goods and services

75.94

Aug. 2007 to Sep. 2009

CESTAT, Delhi

Finance Act, 1994 Denial of Input and Service Tax Credit on welding electrods

0.05

Sep. 2010 to Mar. 2011

CESTAT, Chennai

Finance Act, 1994 Denial of Input and Service Tax Credit on welding electrods

0.18

Apr. 2010 to Jun. 2010

Comm. Appeals Guntur

Andhra Pradesh VAT Act, 2005

Disallowance of Vat credit on project related purchases

0.09

May 2007 to May 2008

Sales Tax Appellate Tribunal, Andhra Pradesh

Andhra Pradesh VAT Act, 2005

Disallowance of Vat credit on project related purchases

0.32

Jun. 2008 to Aug. 2010

DC Appeals, Andhra Pradesh

Central Sales tax Act CST on non submission of forms 0.02 2008-09 CTO, HyderabadIncome Tax Act, 1961 Differential tax demand for section 194 J instead of

section 194 C0.31 2008-09 &

2009-10CIT(Appeals) Vijayawada

Income Tax Act, 1961 Delay in deposit of TDS 0.01 Jul. to Sep. 2009

ITO, Tirupati



(x) The Company has no accumulated losses at the end of the financial year and it has not incurred cash losses in the current and immediately preceding financial year.

(xi) Based on our audit procedures and as per the information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to a financial institutions, banks or debenture holders.

(xii) Based on our examination of documents and records, we are of the opinion that the Company has maintained adequate records where the Company has granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) In our opinion, the Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Order are not applicable to the Company.

(xiv) In respect of dealing/trading in shares, securities, debentures and other investments, in our opinion and according to the information and explanations given to us, proper records have been maintained of the transactions and contracts and timely entries have been made therein. The shares, securities, debentures and other investments have been held by the Company in its own name.

(xv) According to the information and explanations given to us, the Company has not given any guarantee for loans taken by others from bank or financial institutions.

(xvi) Based on the information and explanations given to us by the management, term loans were applied for the purpose for which the loans were obtained.

(xvii) According to the information and explanations given to us and on an overall examination of the balance sheet of the Company, we report that no funds raised on short-term basis have been used for long-term investment.

(xviii) The Company has not made any preferential allotment of shares to parties or companies covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) Based on the books and records produced to us by the management, securities have been created in respect of debentures issued, wherever required.

(xx) During the period covered by our audit report, the Company has not raised any money by way of public issue.

(xxi) We have been informed that an employee, since terminated, of the Company, in connivance with a C&F agent of the Company had misappropriated stocks amounting to around `0.69 Crore during the year under audit. The Company has initiated appropriate remedial action against the concerned parties to recover the above amount. The same has been provided in the books of the Company.

For S. R. Batliboi & co. For S. S. Kothari Mehta & co. Firm Registration no.: 301003E Firm Registration no.: 000756nchartered Accountants chartered Accountants

per Manoj Gupta per Arun K. TulsianPartner PartnerMembership No.: 83906 Membership No.: 89907Place: Gurgaon Place: New DelhiDate: May 16, 2012 Date: May 16, 2012



Balance Sheet as at March 31, 2012


March 31, 2012as at

March 31, 2011eQuitY & liabilitiesShareholder’s FundsShare Capital 2 252.92 252.92 Reserves and Surplus 3 2,479.89 2,341.79

2,732.81 2,594.71 non- current LiabilitiesLong-Term Borrowings 4 1,501.52 1,755.18 Deferred Tax Liability (Net) 5 73.30 41.96 Other Long-Term Liabilities 6 72.49 61.89 Long Term Provisions 7 9.09 2.42

1,656.40 1,861.45 current Liabilities Short-Term Borrowings 8 220.84 33.96 Trade Payables 9 135.05 120.08 Other Current Liabilities 10 186.18 187.06 Short-Term Provisions 11 16.58 7.16

558.65 348.26 total 4,947.86 4,804.42 assetsnon-current assetsFixed AssetsTangible Assets 12 2,965.94 3,090.94 Intangible Assets 12 1.70 2.99 Capital work-in-progress 66.06 33.50

3,033.70 3,127.43 Non-Current Investments 13 892.02 666.20 Long Term Loans and Advances 14 188.92 171.09

4,114.64 3,964.72 current assetsCurrent Investments 15 305.69 6.00 Inventories 16 229.20 266.94 Trade Receivables 17 122.40 90.43 Cash and Cash Equivalents 18 44.91 376.22 Short-Term Loans and Advances 19 131.02 100.11

833.22 839.70 total 4,947.86 4,804.42 Summary of Significant Accounting Policies 1



For S. R. Batliboi & co. For S. S. Kothari Mehta & co. For and on behalf of Board of Directors ofFirm Registration No. 301003E Firm Registration No. 000756N Dalmia cement (Bharat) LimitedChartered Accountants Chartered Accountants

per Manoj Gupta per Arun K. Tulsian Puneet yadu Dalmia y. h. DalmiaPartner Partner Managing Director DirectorMembership No.: 83906 Membership No.: 89907 Vipin Agarwal Manisha BansalPlace : Gurgaon Place : New Delhi Executive Director CompanyDate : May 16, 2012 Date : May 16, 2012 (Finance) Secretary



Statement of Profit and Loss Account for the year ended March 31, 2012



March 31, 2011IncomeRevenue from operations (gross) 20 2,546.51 1,898.76 Less: Excise Duty 294.81 223.07 Revenue from operations (Net) 2,251.70 1,675.69 Other income 21 67.08 45.51 total revenue (i) 2,318.78 1,721.20 ExpensesCost of Raw materials consumed 22 206.86 156.60 (Increase)/ Decrease in inventories of finished goods and work in progress 23 0.31 8.33 Employee benefit expenses 24 104.08 75.54 Other Expenses 25 1,439.80 1,116.56 total (ii) 1,751.05 1,357.03 Earnings before interest, tax, depreciation and amortisation (ebitDa) (i) - (ii) 567.73 364.17 Finance costs 26 150.96 171.15 Depreciation and amortisation expenses 12 160.41 153.98 Profit before Tax 256.36 39.04 Tax expenseCurrent tax 63.73 7.98 MAT Credit (Entitlement) / Charge 7.28 (7.28)

71.01 0.70 Deferred Tax charge 31.34 41.96 Prior year tax written back (0.26) –Total Tax Expense 102.09 42.66 Profit/ (loss) after Tax 154.27 (3.62)Earning per Share 27Basic and Diluted Earnings Per Share (In `) 6.10 (0.15)[Nominal Value of Share `10 (`10 ) each] Summary of Significant Accounting Policies 1



For S. R. Batliboi & co. For S. S. Kothari Mehta & co. For and on behalf of Board of Directors ofFirm Registration No. 301003E Firm Registration No. 000756N Dalmia cement (Bharat) LimitedChartered Accountants Chartered Accountants

per Manoj Gupta per Arun K. Tulsian Puneet yadu Dalmia y. h. DalmiaPartner Partner Managing Director DirectorMembership No.: 83906 Membership No.: 89907 Vipin Agarwal Manisha BansalPlace : Gurgaon Place : New Delhi Executive Director CompanyDate : May 16, 2012 Date : May 16, 2012 (Finance) Secretary



A. corporate InformationDalmia Cement (Bharat) Limited (the Company) is a public Company domiciled in India and incorporated under the provisions of the Companies Act, 1956. Its debt securities are listed on two stock exchanges in India. The Company is engaged in the manufacturing and selling of cement. The Company mainly caters to markets in southern India.

B. Basis of preparationThe financial statements of the Company have been prepared in accordance with generally accepted accounting principles in India (Indian GAAP). The Company has prepared these financial statements to comply in all material respects with the accounting standards notified under the Companies (Accounting Standards) Rules, 2006, (as amended) and the relevant provisions of the Companies Act, 1956. The financial statements have been prepared on an accrual basis and under the historical cost convention, except for assets transferred and vested in the Company as on April 1, 2010 pursuant to the Scheme of Arrangement which are carried at fair market value determined as on April 1, 2010.


c. Presentation and disclosure of financial statementsDuring the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act 1956, has become applicable to the Company, for preparation and presentation of its financial statements. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it has significant impact on presentation and disclosures made in the financial statements. The Company has also reclassified the previous year figures in accordance with the requirements applicable in the current year.

D. Use of estimatesThe preparation of financial statements in conformity with Indian GAAP requires the management to make judgments, estimates and assumptions that affect the reported amounts of revenues, expenses, assets and liabilities and the disclosure of contingent liabilities, at the end of the reporting period. Although these estimates are

based on the management’s best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods.

E. Tangible fixed assetsFixed assets, except for assets transferred and vested in the Company as on April 1, 2010 pursuant to the Scheme of Arrangement, are stated at cost, net of accumulated depreciation and accumulated impairment losses, if any. The cost comprises purchase price, borrowing costs if capitalisation criteria are met and directly attributable cost of bringing the asset to its working condition for the intended use. Any trade discounts and rebates are deducted in arriving at the purchase price.



F. Depreciation on tangible fixed assetsDepreciation on fixed assets is calculated on a straight-line basis using the rates arrived at based on the useful lives estimated by the management, or those prescribed under Schedule XIV to the Companies Act, 1956, whichever is higher. The Company has used the rates different from rates prescribed in Schedule XIV in the following case:-

Rates (SLM)Polysius Kiln Buildings 7.14%

G. Intangible assetsIntangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less accumulated

notes to Financial Statements for the year ended March 31, 2012




notes to Financial Statements for the year ended March 31, 2012 (contd.)

amortisation and accumulated impairment losses, if any.

Intangible assets are amortised on a straight line basis over the estimated useful economic life. The Company uses a rebuttable presumption that the useful life of an intangible asset will not exceed ten years from the date when the asset is available for use. If the persuasive evidence exists to the effect that useful life of an intangible asset exceeds ten years, the Company amortises the intangible asset over the best estimate of its useful life. Such intangible assets and intangible assets not yet available for use are tested for impairment annually, either individually or at the cash-generating unit level. All other intangible assets are assessed for impairment whenever there is an indication that the intangible asset may be impaired.

The amortisation period and the amortisation method are reviewed at least at each financial year end. If the expected useful life of the asset is significantly different from previous estimates, the amortisation period is changed accordingly. If there has been a significant change in the expected pattern of economic benefits from the asset, the amortisation method is changed to reflect the changed pattern. Such changes are accounted for in accordance with AS 5 Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.

A summary of amortisation policies applied to the Company’s intangible assets is as below:

Rates (SLM)Computer software 20% to 33.33%

h. leases Where the company is lesseeFinance leases, which effectively transfer to the Company substantially all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease term at the lower of the fair value of the leased property and present value of minimum lease payments. Lease payments are apportioned between the

finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as finance costs in the statement of Profit and Loss. Lease management fees, legal charges and other initial direct costs of lease are capitalised.

A leased asset is depreciated on a straight-line basis over the useful life of the asset or the useful life envisaged in Schedule XIV to the Companies Act, 1956, whichever is lower. However, if there is no reasonable certainty that the Company will obtain the ownership by the end of the lease term, the capitalised asset is depreciated on a straight-line basis over the shorter of the estimated useful life of the asset, the lease term or the useful life envisaged in Schedule XIV to the Companies Act, 1956.

Leases, where the lessor effectively retains substantially all the risks and benefits of ownership of the leased item, are classified as operating leases. Operating lease payments are recognised as an expense in the statement of profit and loss on a straight-line basis over the lease term.

Where the company is the lessorLeases in which the Company transfers substantially all the risks and benefits of ownership of the asset are classified as finance leases. Assets given under finance lease are recognised as a receivable at an amount equal to the net investment in the lease. After initial recognition, the Company apportions lease rentals between the principal repayment and interest income so as to achieve a constant periodic rate of return on the net investment outstanding in respect of the finance lease. The interest income is recognised in the statement of Profit and Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of Profit and Loss.

Leases in which the Company does not transfer substantially all the risks and benefits of ownership of the asset are classified as operating leases. Assets subject to operating leases are included in fixed assets. Lease income on an operating lease is recognised in the statement of profit and loss on a straight-line basis over the lease term. Costs, including depreciation, are recognised as an expense in the statement of Profit and



Loss. Initial direct costs such as legal costs, brokerage costs, etc. are recognised immediately in the statement of Profit and Loss.

I. Borrowing costsBorrowing cost includes interest, amortisation of ancillary costs incurred in connection with the arrangement of borrowings and exchange differences arising from foreign currency borrowings to the extent they are regarded as an adjustment to the interest cost.


J. Impairment of tangible and intangible assetsThe Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Company estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) net selling price and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. Where the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining net selling price, recent market transactions are taken into account, if available. If no such transactions can be identified, an appropriate valuation model is used.

The Company bases its impairment calculation on detailed budgets and forecast calculations which are prepared separately for each of the Company’s cash-generating units to which the individual assets are allocated. These budgets and forecast calculations are generally covering a period of five years. For longer periods, a long term growth rate is calculated and applied to project future cash flows after the fifth year.

Impairment losses, including impairment on inventories,

are recognised in the statement of profit and loss.

K. Government grants and subsidiesGrants and subsidies from the government are recognised when there is reasonable assurance that (i) the Company will comply with the conditions attached to them, and (ii) the grant/subsidy will be received.

When the grant or subsidy relates to revenue, it is recognised as income on a systematic basis in the statement of Profit and Loss over the periods necessary to match them with the related costs, which they are intended to compensate. Where the grant relates to an asset, it is recognised as deferred income and released to income in equal amounts over the expected useful life of the related asset.

Where the Company receives non-monetary grants, the asset is accounted for on the basis of its acquisition cost. In case a non-monetary asset is given free of cost, it is recognised at a nominal value.

L. InvestmentsInvestments, which are readily realisable and intended to be held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long-term investments.



On disposal of an investment, the difference between its carrying amount and net disposal proceeds is charged or credited to the statement of profit and loss.

M. InventoriesRaw materials, stores and spares are valued at lower of cost and net realisable value. However, materials and other items held for use in the production of inventories are not written down below cost if the finished products in which they will be incorporated are expected to be sold




at or above cost. Cost of raw materials and stores and spares is determined on a weighted average basis.


Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and estimated costs necessary to make the sale.

n. Revenue recognitionRevenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised:

Sale of goodsRevenue from sale of goods is recognised when all the significant risks and rewards of ownership of the goods have been passed to the buyer, usually on delivery of the goods. The Company collects sales taxes and value added taxes (VAT) on behalf of the government and, therefore, these are not economic benefits flowing to the Company. Hence, they are excluded from revenue. Excise duty deducted from revenue (gross) is the amount that is included in the revenue (gross) and not the entire amount of liability arising during the year.

interestInterest income is recognised on a time proportion basis taking into account the amount outstanding and the applicable interest rate. Interest income is included under the head “other income” in the statement of profit and loss.

DividendsDividend income is recognised when the Company’s right to receive dividend is established by the reporting date.

Insurance claimClaims lodged with the insurance companies are accounted on accrual basis to the extent these are measurable and ultimate collection is reasonably certain.

o. Foreign currency translation

Foreign currency transactions and balances

Initial recognitionForeign currency transactions are recorded in the reporting currency, by applying to the foreign currency amount the exchange rate between the reporting currency and the foreign currency at the date of the transaction.

conversionForeign currency monetary items are retranslated using the exchange rate prevailing at the reporting date. Non-monetary items, which are measured in terms of historical cost denominated in a foreign currency, are reported using the exchange rate at the date of the transaction. Non-monetary items, which are measured at fair value or other similar valuation denominated in a foreign currency, are translated using the exchange rate at the date when such value was determined.

Exchange differencesAll other exchange differences are recognised as income or as expenses in the period in which they arise.

Forward exchange contracts entered into to hedge foreign currency risk of an existing asset/ liabilityThe premium or discount arising at the inception of forward exchange contract is amortised and recognised as an expense/ income over the life of the contract. Exchange differences on such contracts, except the contracts which are long-term foreign currency monetary items, are recognised in the statement of profit and loss in the period in which the exchange rates change. Any profit or loss arising on cancellation or renewal of such forward exchange contract is also recognised as income or as expense for the period.

P. Retirement and other employee benefitsRetirement benefit in the form of provident fund contribution to Statutory Provident Fund, pension fund, superannuation fund and ESI are defined contribution schemes. The contributions are charged to the statement of profit and loss for the year when the contributions are due. The Company has no obligation, other than the contribution payable to the provident fund.

The Company operates two defined benefit plans for its employees, viz., gratuity and provident fund contribution to Dalmia Cement Provident Fund Trust. The costs of providing benefits under these plans are determined




on the basis of actuarial valuation at each year-end. Separate actuarial valuation is carried out for each plan using the projected unit credit method. Actuarial gains and losses for both defined benefit plans are recognised in full in the period in which they occur in the statement of Profit and Loss.

Accumulated leave, which is expected to be utilised within the next 12 months, is treated as short-term employee benefit. The Company measures the expected cost of such absences as the additional amount that it expects to pay as a result of the unused entitlement that has accumulated at the reporting date.

The Company treats accumulated leave expected to be carried forward beyond twelve months, as long-term employee benefit for measurement purposes. Such long-term compensated absences are provided for based on the actuarial valuation using the projected unit credit method at the year-end. Actuarial gains/losses are immediately taken to the statement of profit and loss and are not deferred.

Q. Income taxesTax expense comprises of current and deferred. Current income tax is measured at the amount expected to be paid to the tax authorities in accordance with the Income-tax Act, 1961. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted, at the reporting date.


Deferred tax liabilities are recognised for all taxable timing differences. Deferred tax assets are recognised for deductible timing differences only to the extent that there is reasonable certainty that sufficient future taxable income will be available against which such deferred tax assets can be realised. In situations where the Company has unabsorbed depreciation or carry forward tax losses, all deferred tax assets are recognised only if there is virtual certainty supported by convincing evidence that they can be realised against future taxable profits.

At each reporting date the Company re-assesses unrecognised deferred tax assets. It recognises

unrecognised deferred tax assets to the extent that it has become reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which such deferred tax assets can be realised.

The carrying amount of deferred tax assets are reviewed at each reporting date. The Company writes-down the carrying amount of a deferred tax asset to the extent that it is no longer reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available against which deferred tax asset can be realised. Any such write-down is reversed to the extent that it becomes reasonably certain or virtually certain, as the case may be, that sufficient future taxable income will be available.

Deferred tax assets and deferred tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and deferred tax liabilities relate to the taxable entity and the same taxation authority.

Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax. The Company recognises MAT credit available as an asset only to the extent that there is convincing evidence that the Company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Company recognises MAT credit as an asset in accordance with the Guidance Note on Accounting for Credit Available in respect of Minimum Alternative Tax under the Income-tax Act, 1961, the said asset is created by way of credit to the statement of profit and loss and shown as “MAT Credit Entitlement.” The Company reviews the “MAT Credit Entitlement” asset at each reporting date and writes down the asset to the extent the Company does not have convincing evidence that it will pay normal tax during the specified period.

R. Segment reportingIdentification of segmentsThe Company’s operating businesses are organised and managed separately according to the nature of products and services provided, with each segment representing a strategic business unit that offers different products and serves different markets. The analysis of geographical segments is based on the areas in which major operating divisions of the Company operate.




Inter-segment transfersThe Company generally accounts for intersegment sales and transfers at cost plus appropriate margins.

Allocation of common costsCommon allocable costs are allocated to each segment according to the relative contribution of each segment to the total common costs.


Segment accounting policiesThe Company prepares its segment information in conformity with the accounting policies adopted for preparing and presenting the financial statements of the Company as a whole.

S. Earnings Per ShareBasic earnings per share are calculated by dividing the net profit or loss for the period attributable to equity shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of equity shares outstanding during the period. Partly paid equity shares are treated as a fraction of an equity share to the extent that they are entitled to participate in dividends relative to a fully paid equity share during the reporting period. The weighted average number of equity shares outstanding during the period is adjusted for events such as bonus issue, bonus element in a rights issue, share split, and reverse share split (consolidation of shares) that have changed the number of equity shares outstanding, without a corresponding change in resources.


T. ProvisionsA provision is recognised when the Company has a present

obligation as a result of past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not discounted to their present value and are determined based on the best estimate required to settle the obligation at the reporting date. These estimates are reviewed at each reporting date and adjusted to reflect the current best estimates.

The expense relating to any provision is presented in the statement of profit and loss net of any reimbursement.

U. contingent liabilitiesA contingent liability is a possible obligation that arises from past events whose existence will be confirmed by the occurrence or non-occurrence of one or more uncertain future events beyond the control of the Company or a present obligation that is not recognised because it is not probable that an outflow of resources will be required to settle the obligation. A contingent liability also arises in extremely rare cases where there is a liability that cannot be recognised because it cannot be measured reliably. The Company does not recognise a contingent liability but discloses its existence in the financial statements.

V. cash and cash equivalentsCash and Cash equivalents comprise cash at bank and in hand and short-term investments with an original maturity of three months or less.

W. Measurement of EBITDAAs permitted by the Guidance Note on the Revised Schedule VI to the Companies Act, 1956, the Company has elected to present earnings before interest, tax, depreciation and amortisation (EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measures EBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the Company does not include depreciation and amortisation expense, finance costs and tax expense.




2. Share capital(` in Crore)


as atMarch 31, 2011

Authorised :30,00,00,000 (30,00,00,000) Equity Shares of `10/– each 300.00 300.00

300.00 300.00Issued, Subscribed and Fully Paid Up :252,919,005 (252,919,005) Equity Shares of `10/– each 252.92 252.92

252.92 252.92

a. Reconciliation of Equity Shares outstanding at the beginning and at the end of the reporting periodMarch 31, 2012 March 31, 2011

no. of Shares ` in crore no. of Shares ` in croreAt the beginning of the period 252,919,005 252.92 215,000,000 215.00 Issued during the period – – 37,919,005 37.92 At the end of the period 252,919,005 252.92 252,919,005 252.92

b. Terms/ rights attached to Equity sharesThe Company has only one class of equity shares having a face value of `10 per share. Each equity shareholder is entitled to one vote per share. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuring Annual General Meeting.

During the year ended March 31, 2012, the amount of dividend per share recognised as distribution to equity shareholders was `0.55 (Nil).

In the event of winding–up of the Company, the equity shareholders shall be entitled to be repaid remaining assets of the Company in the ratio of the amount of capital paid up on such equity shares.

c. Equity shares held by holding companyMarch 31, 2012 March 31, 2011

no. of Shares ` in crore no. of Shares ` in croreDalmia Bharat Enterprises Limited (holding Company) 215,000,000 215.00 215,000,000 215.00

d. Details of shareholders holding more than 5% shares in the companyMarch 31, 2012 March 31, 2011

no. of Shares % holding no. of Shares % holdingDalmia Bharat Enterprises Limited 215,000,000 85.01% 215,000,000 85.01%KKR Mauritius Cements Investments Limited 37,919,005 14.99% 37,919,005 14.99%




3. Reserves and Surplus(` in Crore)

March 31, 2012 March 31, 2011Business Restructuring ReserveOpening Balance as per last financial statements 1,833.51 – Add: Additions pursuant to Scheme of Arrangement

– 1,833.51

closing Balance 1,833.51 1,833.51 Securities Premium ReserveOpening Balance as per last financial statements 458.70 – Add: Premium on issue of equity shares – 462.08 Less: Expenses incurred in connection with issue of fresh equity shares

– 3.38

closing Balance 458.70 458.70 Debenture Redemption ReserveOpening Balance as per last financial statements 48.75 – Add: Additions pursuant to Scheme of Arrangement

– 48.96

Add: Amount transferred from surplus balance in the Statement of Profit and Loss

9.79 9.79

Less: Amount transferred to surplus balance in the Statement of Profit and Loss

– 10.00

closing Balance 58.54 48.75 Surplus in the Statement of Profit and LossBalance as per last financial statements 0.83 4.24 Profit /(Loss) for the year 154.27 (3.62)Add: Transfer from Debenture Redemption Reserve

– 10.00

Less: AppropriationsTransfer to debenture redemption reserve 9.79 9.79 Proposed Dividend on equity shares 13.91 – Dividend Distribution Tax 2.26 – Total Appropriations 25.96 9.79 net Surplus in the Statement of Profit and Loss 129.14 0.83 Total reserves and surplus 2,479.89 2,341.79




4. Long Term Borrowings(` in Crore)

As at March 31, 2012 As at March 31, 2011SecuredA. Redeemable Non–Convertible Debentures 280.00 280.00 Less: Shown in current maturities of long term borrowings

24.00 256.00 - 280.00

B. Term Loans:i. From Banks 987.16 1,213.84 Less: Shown in current maturities of long term borrowings

70.51 916.65 84.34 1,129.50

ii. From Others 256.20 256.20 (a) 1,428.85 1,665.70 UnsecuredC. Fixed Deposits* 6.56 18.47 Less: Shown in current maturities of long term borrowings

3.18 3.38 3.68 14.79

D. Deferred payment liabilities 73.71 78.46 Less: Shown in current maturities of long term borrowings

4.73 68.98 4.10 74.36

E. From Bank 0.33 0.35 Less: Shown in current maturities of long term borrowings

0.02 0.31 0.02 0.33

(b) 72.67 89.48 Total long term borrowings (A+B) 1,501.52 1,755.18

1) Debentures referred to in A above to the extent of:i) 10.35%, Series XIII `100 Cr. (`100 Cr.) are secured by a first pari–passu charge on the Immovable properties of

Cement unit at Dalmiapuram & redeemable in three yearly equal installments commencing from May 8, 2014.

ii) 9.00%, Series XI A `50 Cr. (`50 Cr.) are secured by a first pari–passu charge on all the movable and immovable properties of Cement Unit at Dalmiapuram (except inventories and trade receivables) & redeemable in three yearly installments in the ratio of 30:30:40 commencing from October 15, 2013.

iii) 8.87%, Series XI `50 Cr. (`50 Cr.) are secured by a first pari–passu charge on all the movable and immovable properties of Cement unit at Dalmiapuram (except inventories and trade receivables) & redeemable in three yearly installments in the ratio of 30:30:40 commencing from May 15, 2013.

iv) 9.00%, Series XB ̀ 40 Cr. (`40 Cr.) are secured by a first pari–passu charge on whole of the movable and immovable properties (except trade receivables) of Cement unit at Dalmiapuram & redeemable in three yearly installments in the ratio of 30:30:40 commencing from December 17, 2012.

v) 8.90%, Series XA ̀ 40 Cr. (`40 Cr.) are secured by a first pari–passu charge on whole of the movable and immovable properties (except trade receivables) of Cement unit at Dalmiapuram & redeemable in three yearly installments in the ratio of 30:30:40 commencing from December 17, 2012.

2) Term Loans from Banks referred to in B (i) above to the extent of :i) Libor plus 2.146% (presently 2.9313%) `58.66 Cr. (`60.34 Cr.) are secured by way of exclusive charge on Vertical

roller mills & other machineries and equipments acquired through this loan for projects at Kadapa & Ariyalur. The Loan has been availed in foreign currency repayable in half yearly installments of USD 0.10 Cr. each till August 2017.




ii) `891.00 Cr. (`891.00 Cr.) are secured by exclusive first charge on land and building and hypothecation of all the fixed assets of Cement units at Kadapa and Ariyalur excluding assets charged to working capital lenders and Vertical roller mills & other machineries and equipments for projects at Kadapa & Ariyalur acquired under foreign currency loan at base rate plus 1.50% (present 11%). It is repayable within 40 unequal quarterly installment in the range of `11.14 Cr. to `47.33 Cr. each commencing after 5 years from 1st disbursement, i.e. December 2012.

iii) `37.50 Cr. (`112.50 Cr.) are secured by exclusive first charge on land and building and hypothecation of all the fixed assets of Cement units at Kadapa and Ariyalur excluding assets charged to working capital lenders and Vertical roller mills & other machineries and equipments for projects at Kadapa & Ariyalur acquired under foreign currency loan at Base rate plus 1.50% (present 11%). It is payable in 2 equal quarterly installment of `18.75 Cr. each till September 2012.

iv) Nil (`150 Cr.) is secured by a subservient charge on the assets of Cement division.

3) Term Loans from others referred to in B (ii) above to the extent of:0.10%, `256.20 Cr. (`256.20 Cr.) are secured by a first pari–passu charge on the movable and immovable properties of Cement unit at Dalmiapuram. Repayment schedule is yet to be finalised.

4) Fixed deposit referred to in C above to the extent of: `6.56 Cr. (`18.47 Cr.) are repayable in next 1 month to 36 months with interest rate in the range of 9% to 10%.

*Includes from Directors `0.29 Cr. (`0.26 Cr.)

5) Interest free, ̀ 73.71 Cr. (`78.46 Cr.) deferred payment liabilities referred to in D above are repayable in unequal quarterly installments in the range of `0.05 Cr. to `6.59 Cr. each till FY 2016–17.

6) Housing loans from Bank referred to in E above to the extent of `0.05 Cr. (`0.07 Cr.) is payable in unequal monthly installment in the range of ` 0.0018 Cr. to ` 0.0025 Cr. each till FY 2014–15. For `0.28 Cr. (`0.28 Cr.) repayment terms are yet to be communicated by bank.

5. Deferred Tax Liability (net)Deferred Tax assets/ liabilities are attributable to the following items :

(` in Crore)as at

March 31, 2012as at

March 31, 2011LiabilitiesDepreciation 79.24 48.61assetsUnabsorbed depreciation - 4.73Provision for doubtful debts and advances 1.32 1.76Expenses allowable for tax purpose when paid 4.58 0.16Others 0.04 -

5.94 6.65net 73.30 41.96




6. other Long Term Liabilities(` in Crore)



Security deposit received 66.85 60.10Mines reclamation exp. 2.21 –Other Liabilities 3.43 1.79

72.49 61.89

7. Long Term Provisions(` in Crore)



Provision for leave encashment 2.64 1.99Provision for other employee benefits 6.45 0.43

9.09 2.42

8. Short Term borrowings(` in Crore)



SecuredA. Working capital loan from Banks 12.28 26.14B. Foreign currency loan from Banks 207.53 –(a) 219.81 26.14UnsecuredC. Fixed Deposits 1.03 7.82(b) 1.03 7.82Total short term borrowings (A+B) 220.84 33.96

A) Working capital loans are secured by hypothecation of inventories and other assets in favour of the participating banks ranking pari–passu on inter–se basis, repayable in next one year and carry interest rate in the range of 11.75% to 12.50%.

B) Foreign currency loans have been secured against the pledge of mutual funds and hypothecation of inventories and trade receivables repayable in next 1 month to 11 months with Interest in the range of LIBOR Plus 0.35% to LIBOR plus 1.95% (Presently 0.8237% to 2.55%).

C) Fixed deposit referred to in C above to the extent of: `1.03 Cr. (`7.82 Cr.) are repayable in next 1 month to 1 year with interest rate in the range of 9.00% to 9.25%.

9. Trade Payables(` in Crore)



135.05 120.08(Refer note 31 for details of notes to financial statements of dues to Micro & Small Enterprises) 135.05 120.08




10. other current Liabilities(` in Crore)



Current maturities of long term borrowings 102.44 92.14Interest accrued but not due on borrowings 6.28 6.13Advance from customers 14.93 14.62Security deposit received 3.03 4.58Director’s Commission payable 0.40 0.12Unclaimed Fixed Deposits and Interest thereon* 0.17 0.20Other liabilities– Statutory dues 49.82 45.03– Others 9.11 24.24

186.18 187.06

* Not due for deposit with Investor Education & Protection Fund.

11. Short Term Provisions(` in Crore)



Proposed dividend 13.91 –Dividend distribution tax 2.26 –Provision for employee benefits 0.41 0.35Provision for Income Tax (net of advance tax Nil (`3.78 Cr.)) – 6.81

16.58 7.16

12. Fixed Assets(` in Crore)

Tangible Intangible totalLand Building Plant and

equipmentFurniture

and Fixtures

Vehicles office equipment

computer Software

costas at April 1, 2010 – – – – – – – – AdditionsAdditions pursuant to Scheme of Arrangement

256.64 224.77 2,628.18 2.95 12.41 17.30 4.49 3,146.74

Additions during the year 20.60 34.87 44.45 0.24 0.48 0.72 – 101.36 Deductions during the year

– – 0.17 0.02 – – – 0.19

as at March 31, 2011 277.24 259.64 2,672.46 3.17 12.89 18.02 4.49 3,247.91 Additions during the year 8.03 1.44 33.17 0.06 1.52 1.73 0.25 46.20 Disposals during the year – 0.10 12.33 – 0.07 – – 12.50 as at March 31, 2012 285.27 260.98 2,693.30 3.23 14.34 19.75 4.74 3,281.61 Depreciation/ Amortisationas at April 1, 2010 – – – – – – – – Charge for the year – 7.05 140.85 0.55 1.37 2.66 1.50 153.98 Disposals – – – – – – – – as at March 31, 2011 – 7.05 140.85 0.55 1.37 2.66 1.50 153.98 Charge for the year – 7.39 147.63 0.22 1.41 2.22 1.54 160.41 Disposals – – 0.41 – 0.01 – – 0.42 as at March 31, 2012 – 14.44 288.07 0.77 2.77 4.88 3.04 313.97 net Blockas at March 31, 2011 277.24 252.59 2,531.61 2.62 11.52 15.36 2.99 3,093.93 as at March 31, 2012 285.27 246.54 2,405.23 2.46 11.57 14.87 1.70 2,967.64




13. non–current Investments(` in Crore)

As at March 31, 2012 As at March 31, 2011Trade investmentsInvestments in AssociatesEquity SharesQuoted25,814,904 (25,814,904) Shares of `2/– each fully paid up in OCL India Limited

408.27 408.27

Unquoted130,000 (130,000) Shares of `10/– each fully paid up in DCB Power Ventures Limited

91.08 91.08

Investments in Joint VentureEquity SharesUnquoted1,836,500 (1,836,500) Shares of `10/– each fully paid up in Khappa Coal Company Private Limited

1.84 1.84

Investments in Subsidiaries Equity SharesUnquoted50,000 (50,000) Shares of `10/– each fully paid up in Arjuna Brokers & Minerals Limited. 0.05 0.05161,711,000 (161,711,000) Shares of `10/– each fully paid up in Dalmia Cement Ventures Limited. 162.46 162.46250,000 (250,000) Shares of `10/– each fully paid up in D.I. Properties Limited. 0.25 0.2550,000 (50,000) Shares of `10/– each fully paid up in Dalmia Minerals & Properties Limited. 0.05 0.0550,000 (50,000) Shares of `10/– each fully paid up in Geetee Estates Limited. 0.05 0.05250,000 (250,000) Shares of `10/– each fully paid up in Hemshila Properties Limited. 0.25 0.2550,000 (50,000) Shares of `10/– each fully paid up in Ishita Properties Limited. 1.30 1.3050,000 (50,000) Shares of `10/– each fully paid up in Shri Radha Krishna Brokers & Holdings Limited. 0.05 0.05250,000 (250,000) Shares of `10/– each fully paid up in Shri Rangam Properties Limited. 0.25 0.2550,000 (50,000) Shares of `10/– each fully paid up in Sri Dhandauthapani Mines & Minerals Limited. 0.05 0.0550,000 (50,000) Shares of `10/– each fully paid up in Sri Madhusudana Mines & Properties Limited. 0.05 0.0550,000 (50,000) Shares of `10/– each fully paid up in Sri Shanmugha Mines & Minerals Limited. 0.05 0.0550,000 (50,000) Shares of `10/– each fully paid up in Sri Subramanya Mines & Minerals Limited. 0.05 0.0550,000 (50,000) Shares of `10/– each fully paid up in Sri Swaminatha Mines & Minerals Limited. 0.05 0.0550,000 (50,000) Shares of `10/– each fully paid up in Sri Trivikrama Mines & Properties Limited. 0.05 165.01 0.05 165.01othersEquity Shares (unquoted)27,500,000 (–) Shares of `10/– each fully paid up in Calcom Cement India Ltd. (Refer note 44 of notes to financial statements). 27.93 –




(` in Crore)As at March 31, 2012 As at March 31, 2011

DebenturesUnquoted5,900 (–) zero coupon optionally redeemable convertible debentures of `1,00,000/– each in Saroj Sunrise Pvt. Ltd. (Refer note 44 of notes to financial statements). 59.00 –other InvestmentsUnits of Mutual Funds (Quoted)Debt based schemes 138.89 –total 892.02 666.20Quoted (including Mutual Funds):Book Value 547.16 408.27Market Value 397.86 284.22Book Value of Unquoted Investments 344.86 257.93

14. Long Term Loans and Advances (considered good and unsecured unless otherwise stated)(` in Crore)



Capital advances 4.63 2.69 Security deposit 15.98 16.62 Loans and advances to:Employees@ 0.74 –Related Parties: Advance against Share Application Money 4.28 4.04 Advance for Warrants 56.73 56.73 Others 53.46 48.96 (Refer note 42 of notes to financial statements)Advances recoverable in cash or in kind or for value to be received 31.80 14.89 MAT Credit entitlement – 7.28 Advance Income Tax (Net of Provision for Tax `70.21 Cr. (Nil)) 9.15 –Deposit and Balances with Government Departments and Other Authorities 12.15 19.88

188.92 171.09 @includesDue form officers of the Company 0.74 –

15. current Investments (` in Crore)



Units of Mutual Funds (Quoted) Debt based schemes 305.69 6.00 total 305.69 6.00 Quoted Book Value 305.69 6.00 Market Value 309.49 6.00




16. Inventories(` in Crore)



(Mode of valuation – refer note 1(k) on inventories)Raw Materials 9.57 5.13 Packing Materials On hand 4.71 4.52 In transit 0.53 –Work in Progress 36.61 29.92 Finished Goods On hand 19.15 27.47 In transit 7.16 5.84 Stores, Spares etc On hand 124.01 96.51 In transit 27.46 97.55

229.20 266.94

17. Trade Receivables(` in Crore)

As at March 31, 2012 As at March 31, 2011a) Receivables outstanding for a period exceeding six months from the date they are due for payment Considered good Secured 0.96 0.79 Unsecured 2.25 1.28 Considered doubtful 14.11 13.89 Less: Provision for Bad and Doubtful receivables

14.11 – 13.89 –

(a) 3.21 2.07 b) other receivables Considered good Secured 60.73 39.88 Unsecured 133.94 87.31 (b) 194.67 127.19 Trade Receivables (A+B) 197.88 129.26 Less: Provision for Rebate / Discount 75.48 38.83

122.40 90.43

18. cash and cash Equivalents(` in Crore)

As at March 31, 2012 As at March 31, 2011Cash on hand 0.05 0.09 Cheques in Hand 13.35 0.02 Balances with Scheduled Banks : – On current accounts 29.66 222.88 – On deposit accounts 1.84 153.22 Other bank balances – Margin money (pledged with bank against bank guarantee)

0.01 0.01

44.91 376.22




19. Short Term Loans and Advances(` in Crore)

As at March 31, 2012 As at March 31, 2011SecuredLoan to Employees 0.02 0.06 Unsecured, considered goodLoan and advances to – Employees@ 0.79 2.14 – Related parties (Refer note 42 of notes to financial statements)

1.89 0.45

Other loans and advances 108.12 50.72 Interest receivable 1.60 1.59 Deposit and Balances with Government Departments and Other Authorities 18.60 45.15


20. Revenue from operations(` in Crore)



Revenue from operationsCement Sales 2,498.49 1,811.96 Other Sales 48.02 86.80

2,546.51 1,898.76

21. other Income(` in Crore)



Dividend income– from non current Investments 10.33 10.33 – from current investments 12.26 –Interest Income on Bank deposits & other 7.45 2.31 Profit on sale of Investments 4.77 13.85 Sales Tax incentive 11.82 6.30 (Refer note 34 of notes to financial statements)Miscellaneous receipts 20.45 12.72

67.08 45.51

22. cost of Raw materials consumed(` in Crore)



class of ProductLimestone 115.57 82.37 Gypsum 25.76 26.00 Fly ash 50.46 40.66 Others 15.07 7.57

206.86 156.60




23. (Increase)/ Decrease in inventories of finished goods and work in progress(` in Crore)



Finished Goods – Closing stock 26.31 33.31 – Opening stock 33.31 – – Addition pursuant to Scheme of Arrangement

– 33.31 19.87 19.87

7.00 (13.44)Work–in–Process – Closing stock 36.61 29.92 – Opening stock 29.92 – – Addition pursuant to Scheme of Arrangement – 29.92 51.69 51.69

(6.69) 21.77 0.31 8.33

24. Employee Benefit Expenses(` in Crore)



Salaries, Wages and Bonus 86.82 60.42 Contribution to Provident Fund and Other Funds 5.04 3.90 (Refer note 40 of notes to financial statements)Workmen and Staff Welfare expenses 12.22 11.22

104.08 75.54

25. other Expenses(` in Crore)



Power and Fuel (Refer note 34 of financial statements)

704.11 552.71

Packing Materials 98.87 77.00 Consumption of Stores and Spares Parts 5.65 3.08 Freight and Forwarding Charges 316.50 248.00 Repairs and Maintenance – Plant & Machinery 66.05 53.04 – Buildings 3.03 2.46 Rent 1.47 1.68 Rates and Taxes 3.15 2.83 Insurance 2.49 2.35 Management Service Charges 64.19 48.60 Branch Selling Expenses 54.32 43.46 Excise duty variation on opening / closing inventories

0.82 5.29

Exchange Fluctuation 5.36 – Miscellaneous Expenses 113.79 76.06

1,439.80 1,116.56




26. Finance costs(` in Crore)



Interest – On term loans and debentures 133.71 159.02 – On borrowing from banks 0.04 0.41 – Others 7.90 8.72 Other borrowing cost 4.17 2.70 Exchange differences to the extent considered as an adjustment to borrowing cost

5.14 0.30

150.96 171.15

27. Earning Per ShareFor the year ended


March 31, 2011Net profit for calculation of basic and diluted EPS (` in Cr.) 154.27 (3.62)Total number of equity shares outstanding at the end of the year 252,919,005 252,919,005Weighted average number of equity shares in calculating basic and diluted EPS 252,919,005 236,816,414Basic and Diluted EPS (`) 6.10 (0.15)

28. contingent Liabilities (not provided for) in respect of:(` in Crore)

s. no. Particulars 2011–12 2010–11a) Claims against the Company not acknowledged as debts 44.62 63.25b) Demand raised by following authorities in dispute: Excise & Service tax 107.85 94.06 Other tax matters 2.45 0.64c) Guarantees/Counter Guarantees given to banks on account of guarantees issued by the banks to Bodies Corporate 4.00 4.00 total 158.92 161.95

Based on favourable decisions in similar cases, legal opinion taken by the Company, discussions with the solicitors etc, the Company believes that there is a fair chance of favourable decisions in respect of the items listed above and hence no provision is considered necessary against the same.

29. capital and other commitments(` in Crore)

Particulars 2011–12 2010–11Estimated amount of contracts remaining to be executed on capital account and not provided for (net of advances) 14.85 4.62Other commitments – –




30. Remuneration paid to auditors (included in Miscellaneous Expenses):(` in Crore)

Particulars 2011–12 2010–11Statutory auditorsa) as an auditor i) Statutory audit fee 0.22 0.21 ii) Tax audit fee 0.04 – iii) Limited review 0.20 0.07

In other capacity i) Company law matter 0.01 – ii) Management Services – 0.04 iii) Certification fee 0.02 0.02

Reimbursement of expenses 0.11 0.02

cost Auditora) Audit Fee 0.01 0.01b) For Expenses – –

31. Details of dues to Micro and Small Enterprises as per MSMED Act, 2006(` in Crore)

Particulars 2011–12 2010–11The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year

0.07 –

The amount of interest paid by the buyer in terms of section 16, of the Micro Small and Medium Enterprises (Development) Act, 2006 along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year

– –

The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year) but without adding the interest specified under Micro Small and Medium Enterprise Development Act, 2006.

– –

The amount of interest accrued and remaining unpaid at the end of each accounting year; and

– –

The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise for the purpose of disallowance as a deductible expenditure under section 23 of the Micro Small and Medium Enterprise Development Act, 2006

– –

total 0.07 –

32. operating LeaseAssets taken on lease

The Company has entered into cancellable lease agreements with an average life of between one to five years with renewal option at the mutual consent of lessor & lessee. Some of the lease agreements contain escalation clause of upto 10%. There are no restrictions placed upon the Company by entering into these leases.

(` in Crore)Particulars 2011–12 2010–11Lease payments for the year 43.91 40.38total 43.91 40.38




33. Particulars of forward contracts and Unhedged Foreign currency Exposure as at the Balance Sheet date:Forward contract outstanding as at Balance Sheet date:

Particulars currency Amount in Foreign currency

Amount (` in crore)

Purpose

Buy Euro 47,900 0.32 To hedge the import creditors for Spare Parts. (739,961) (4.65)

total euro 47,900 0.32(739,961) (4.65)

Buy GBP 57,804 0.46 To hedge the import creditors for Spare Parts.(–) (–)

total GbP 57,804 0.46(–) (–)

Buy USD 918,000 4.60 To hedge the import creditors for capital goods.(–) (–)

Buy USD 14,464,800 72.08 To hedge the import creditors for Coal and spare parts.(10,926,210) (49.60)

Buy USD 36,949,536 192.60 To hedge the repayment of principal and interest foreign

currency loans.(1,212,678) (5.64)

total usD 52,332,336 269.28(12,138,888) (55.24)

Particulars of Unhedged Foreign currency Exposure:

Particulars Amount in Foreign currency Amount (` in crore)

Foreign currency loans USD 15,110,511 (USD 12,427,915) 77.80(Closing rate 1 USD = `51.49 (`44.77)) (55.64)

Purchase of spare parts Nil (Euro 636,000) –(Closing rate 1 Euro = N.A. (`63.1077)) (4.01)

Purchase of Coal, Spare Parts. Nil (USD 4,098,000) –(Closing rate 1 USD = N.A. (`44.77)) (18.35)

34. The Company has recognised power and sales tax incentives at its at Kadapa unit, Andhra Pradesh under the Industrial Investment Promotion policy 2005–2010 issued by Government of Andhra Pradesh. Under the policy, the Company is entitled to a fixed power cost reimbursement upto `0.75 per unit of power consumed and 25% of Central Sales Tax and Value Added Tax paid in Andhra Pradesh. The Company has recognised the same as revenue grant as per Accounting Standard –12. The amounts recognised in Statement of Profit and Loss is as given below:–

(` in Crore)Particulars 2011–12 2010–11Power incentive (netted from Power and Fuel in Note 25) 4.87 3.07Sales tax incentive (Other income in Note 21) 11.82 6.30total 16.69 9.37

35. The Company has debited direct expenses relating to limestone mining, captive power generation etc. to cost of raw material consumed, power & fuel and other accounts as under:

(` in Crore)Particulars 2011–12 2010–11Consumption of stores and spare parts 40.17 32.29Rent 42.44 38.70Insurance 0.08 0.11Salary and wages 3.04 2.75

85.73 73.85




Expenses as mentioned above are debited to following expenses account:(` in Crore)

Particulars 2011–12 2010–11Cost of raw materials consumed 3.00 2.75Power and fuel 37.64 36.20Repair and maintenance to Plant & Machinery 39.82 31.59Branch selling expenses 5.20 3.30Repair and maintenance to building 0.07 –Misc. expenses – 0.01

85.73 73.85

36. Additional information pursuant to the provisions of Part II of Schedule VI to the Companies Act, 1956: A) Details of Finished Goods

(` in Crore)class of Product 2011–12 2010–11opening stockCement 33.31 19.87closing stockCement 26.31 33.31

B) cIF Value of Imports(` in Crore)

Particulars 2011–12 2010–11Stores & spares 8.39 6.49Coal 418.24 418.01

37. Expenditure in foreign currency (Accrual basis):(` in Crore)

Particulars 2011–12 2010–11Professional and Consultation Fees 3.21 1.12Interest 2.94 2.48Travelling expense 0.04 0.04Others 0.64 4.15total 6.83 7.79

38. Earnings in foreign currency (Accrual basis):

(` in Crore)Particulars 2011–12 2010–11Export of goods at FOB value 1.95 7.05total 1.95 7.05

39. Details regarding imported and indigenous materials consumed during the year:

Imported Indigenous Value of total consumption

Value(` in crore)

Percentage to total consumption

Value(` in crore)

Percentage to total consumption (` in crore)

Raw Materials – – 206.86 100.00 206.86(–) (–) (156.60) (100.00) (156.60)

Spares Parts etc. 3.14 6.85 42.68 93.15 45.82(2.16) (6.11) (33.21) (93.89) (35.37)




40. Gratuity and Other Post Employment Benefit PlansGratuityThe Company has a defined benefit gratuity plan. Every employee who has completed five years or more of service gets a gratuity on departure at 15 days salary (last drawn salary) for each completed year of service. The Scheme is funded with an insurance Company in the form of a qualifying insurance policy.

The following tables summarise the components of net benefit expense recognised in the Statement of Profit and Loss and the funded status and amounts recognised in the Balance Sheet for the plan.

Provident FundThe Company contributes provident fund liability to Dalmia Cement Provident Fund Trust. As per the Guidance Note on implementing AS 15, Employee Benefit (Revised 2005) issued by the Accounting Standards Board (ASB), provident funds set up by the employers, which require interest shortfall to be met by the employer, needs to be treated as defined benefit plan.

During the current financial year, actuarial valuation for Provident Fund for the financial year 2011–12 was carried out in accordance with the Guidance Note issued by the Actuarial Society of India, and accordingly, the Company has provided shortfall in provident fund liability in the books. No actuarial valuation was carried out in the last year pending issuance of guidance note in this regard. Further, there was no shortfall in the provident fund liability ascertained by the Company in the last year. In view of this, comparative figures for last year have not been given.

Statement of Profit and Loss Net employee benefit expense (recognised in Employee Benefit Expenses)

(` in Crore)Particulars Gratuity (Funded) PF Trust (Funded)

2011–12 2010–11 2011–12Current service cost 1.15 1.01 0.67Interest cost on benefit obligation 0.75 – –Expected return on plan assets (1.07) – –Net actuarial (Gain)/ Loss recognised in the year (0.05) (1.00) –net Benefit Expense 0.78 0.01 0.67Actual return on planned assets 1.07 0.81 –

Balance Sheet(` in Crore)


Present value of defined benefit obligation as at year–end 11.06 9.49 7.63Fair value of plan assets as at year–end 12.22 11.43 7.59Funded status {( Surplus/(Deficit)} 1.16 1.94 (0.04)net Asset/(Liability) as at year end 1.16 1.94 (0.04)

changes in the present value of the defined benefit obligation are as follows:(` in Crore)


Opening defined benefit obligation 9.49 – 6.84Contribution by plan participation / employees – – 0.67Acquisition adjustments – 8.70 –Current service cost 1.15 1.01 0.67Interest cost 0.76 – 0.58Benefits paid out of funds (0.28) (0.03) (1.36)Actuarial (Gains)/ losses on obligation (0.06) (0.19) (0.13)Settlements / transfer in – – 0.36closing defined benefit obligation 11.06 9.49 7.63




changes in the fair value of plan assets are as follows:(` in Crore)


Opening fair value of plan assets 11.43 – 6.67Contribution by plan participation / employees – – 0.67Expected return on plan assets 1.07 – 0.57Acquisition adjustments – 8.70 –Contribution by employer – 1.95 0.67Benefits paid (0.28) (0.03) (1.36)Actuarial gains/ (losses) on obligation – 0.81 0.01Settlements / transfer in – – 0.36Closing fair value of plan assets 12.22 11.43 7.59

The Company expects to contribute `0.83 Cr. (`0.85 Cr.) to gratuity and `0.78 Cr. to PF trust in 2012–13.

The major categories of plan assets as a percentage of the fair value of total plan assets are as follows:


Qualifying insurance policy 100% 100% –Govt. securities and financial securities as defined under Income Tax rules – – 100%


The principal assumptions used in determining defined benefits for the company are shown below:Particulars Gratuity (Funded) PF Trust (Funded)

2011–12 2010–11 2011–12Discount rate 8.00% 8.00% 8.00%Expected rate of return on assets 9.40% 9.15% –Mortality table lic (1994–96)

duly modifiedlic (1994–96) duly modified

lic (1994–96) duly modified

Salary escalation 7.00% 7.00% –


Amounts for the current and previous year in respect of defined benefit plans are as follows:(` in Crore)


Defined benefit obligation 11.06 9.49 7.63Plan assets 12.22 11.43 7.59Surplus/ (deficit) 1.16 1.94 (0.04)Experience adjustment on plan assets 0.02 0.81 –Experience adjustment on plan liabilities 0.06 0.19 –As AS–15 was applicable for the Company from the previous financial year, the above disclosure as required under para 120(n) has been made prospectively from the date it became applicable on the Company.




Provident and other fundscontribution to Defined contribution Plans:

(` in Crore)Particulars 2011–12 2010–11Provident Fund/superannuation fund/ ESI/pension scheme 3.66 3.41

41. The Company is operating in single segment ‘Cement’ which is the primary business segment. Secondary segment by geographical location is as under:

(` in Crore)Particulars 2011–12 2010–11Domestic turnover 2,536.15 1,889.03Export turnover 10.36 9.73

2,546.51 1,898.76

There are no assets outside India except for trade receivables of ` Nil (`0.17 Cr.) as at year end.

42. Related Party Disclosure as required by Accounting Standard–18.

a) List of related parties along with nature and volume of transactions is given below: Related parties where control exists: i. holding company Dalmia Bharat Enterprises Limited

ii. Subsidiaries of the companyArjuna Brokers & Minerals Limited, Dalmia Cement Ventures Limited, D.I. Properties Limited, Dalmia Minerals & Properties Limited, Geetee Estates Limited, Hemshila Properties Limited, Ishita Properties Limited, Shri Radha Krishna Brokers & Holdings Limited, Shri Rangam Properties Limited, Sri Dhandauthapani Mines & Minerals Limited, Sri Madhusudana Mines & Properties Limited, Sri Shanmugha Mines & Minerals Limited, Sri Subramanya Mines & Minerals Limited, Sri Swaminatha Mines & Minerals Limited, Sri Trivikrama Mines & Properties Limited.

iii. Step down Subsidiaries of Dalmia cement Ventures Limited Golden Hills Resort Private Limited and Rajputana Properties Private Limited

iv. Step down Subsidiaries of Dalmia Minerals & Properties Limited Cosmos Cements Limited and Sutnga Mines Private Limited

Related parties with whom transactions have taken place during the year: i. Fellow subsidiaries Dalmia Power Limited, Kanika Investment Limited

ii. Associate of the company OCL India Limited, DCB Power Ventures Limited

iii. Joint Ventures Khappa Coal Company Private Limited

iv. Key Management Personnel/Director of the companyShri J. H. Dalmia–Director, Shri Y. H. Dalmia–Director, Shri Gautam Dalmia – Managing Director, Shri Puneet Yadu Dalmia – Managing Director, Shri N. Gopalaswamy – Director, Shri T. Venkatesan – Director.




v. Relatives of Key Management Personnel/DirectorShri V. H. Dalmia (Brother of Director), Shri R. H. Dalmia (Brother of Director), Smt. Kavita Dalmia (Wife of Director), Smt. Kala Venkatesan (Wife of Director).

vi. Enterprises controlled by the Key Management Personnel of the companyShri Nataraj Ceramic and Chemical Industries Limited, Keshav Power Limited, Himshikhar Investment Limited, Dalmia Solar Power Limited, Dalmia Bharat Sugar and Industries Limited, Vaidhehi Trust, Sukeshi Trust, Sumana Trust.

The following transactions were carried out with the related parties in the ordinary course of business:(` in Crore)

nature of Transaction holding company

Fellow Subsidiaries

Subsidiary companies

Associate Joint

Venture

Key

Management

Personnel/

Director

Relatives

of Key

Management

Personnel/

Director

Key

Management

Personnel

controlled

enterprises

total

Sale of goods 5.32 – – 9.54 – – – 0.48 15.34

(5.79) (–) (–) (26.68) (–) (–) (–) (0.41) (32.88)

Reimbursement of expenses – Receivable 0.36 – 0.15 0.10 – – – 0.10 0.71

(–) (–) (–) (–) (–) (–) (–) (–) (–)

Reimbursement of expenses – Payable 0.45 – 0.07 – – – – 0.14 0.66

(14.94) (–) (–) (–) (–) (–) (–) (1.31) (16.25)

Purchase of goods and services 80.24 – – – – – – 25.98 106.22

(64.27) (–) (–) (27.77) (–) (–) (–) (31.28) (123.32)

Rent/Lease rent payment – – 0.04 35.40 – – – – 35.44

(–) (–) (0.03) (35.40) (–) (–) (–) (–) (35.43)

Receipt of fund on their behalf and transfer 1.49 – – – – – – – 1.49

(34.50) (–) (–) (–) (–) (–) (–) (227.99) (262.49)

Loans and Advances given – – 5.18 – 0.24 – – – 5.42

(–) (–) (15.48) (–) (–) (–) (–) (–) (15.48)

Sale of Fixed Assets – – – – – – – 0.01 0.01

(–) (–) (–) (–) (–) (–) (–) (–) (–)

Purchase of Fixed Assets – – 0.60 – – – – 0.11 0.71

(–) (–) (0.41) (–) (–) (–) (–) (1.34) (1.75)

Dividend Income – – – 10.33 – – – – 10.33

(–) (–) (–) (10.33) (–) (–) (–) (–) (10.33)

Fixed Deposit received – – – – – 0.13 0.04 – 0.17

(–) (–) (–) (–) (–) (–) (3.60) (0.99) (4.59)

Interest paid on Fixed Deposit – – – – – 0.03 0.96 0.03 1.02

(–) (–) (–) (–) (–) (–) (2.08) (0.09) (2.17)

Salary & Perquisites – – – – – 8.11 – – 8.11

(–) (–) (–) (–) (–) (–) (–) (–) (–)

1. Sale of goods includes transaction with Dalmia Bharat Enterprises Limited `5.32 Cr. (Previous Year `5.79 Cr.), OCL India Limited `9.54 Cr. (Previous Year `26.68 Cr.).

2. Reimbursement of expenses – receivable includes transaction with Dalmia Bharat Enterprises Limited ̀ 0.36 Cr. (Previous Year Nil), Dalmia Cement Ventures Limited `0.12 Cr. (Previous Year Nil), OCL India Limited `0.10 Cr. (Previous Year Nil), Dalmia Bharat Sugar and Industries Limited `0.10 Cr. (Previous Year Nil).




3. Reimbursement of expenses – payable includes transaction with Dalmia Bharat Enterprises Limited `0.45 Cr. (Previous Year `14.94 Cr.), Dalmia Cement Ventures Limited `0.07 Cr. (Previous Year Nil), Dalmia Bharat Sugar and Industries Limited `0.14 Cr. (Previous Year `1.31 Cr.).

4. Purchase of goods and services includes transaction with Dalmia Bharat Enterprises Limited `80.24 Cr. (Previous Year `64.27 Cr.), DCB Power Ventures Limited Nil (Previous Year `27.77 Cr.), Keshav Power Limited `24.72 Cr. (Previous Year `28.32 Cr.).

5. Rent/ lease rent payment includes transaction with DCB Power Ventures Limited `35.40 Cr. (Previous Year `35.40 Cr.).

6. Receipt of fund on their behalf and transfer includes transaction with Dalmia Bharat Enterprises Limited `1.49 Cr. (Previous Year `34.50 Cr.), Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `227.99 Cr.).

6. Loan and advances given includes transaction with Dalmia Minerals & Properties Limited `0.45 Cr. (Previous Year `15.42 Cr.), Geetee Estates Limited `4.00 Cr. (Previous Year Nil).

7. Purchase of fixed assets includes transaction with Shri Trivikrama Mines and Properties Limited `0.31 Cr. (Previous Year Nil), Arjuna Brokers & Properties Ltd. Nil (Previous Year `0.19 Cr.), Dalmia Minerals & Properties Limited `0.21 Cr. (Previous Year Nil), Himshikar Investment Limited `0.10 Cr. (Previous Year `1.13 Cr.), Dalmia Solar Power Ltd Nil (Previous Year `0.21 Cr.).

8. Sale of Fixed Assets includes transaction with Dalmia Bharat Sugar and Industries Limited `0.01 Cr. (Previous Year Nil).

9. Dividend Income includes transaction with OCL India Limited `10.33 Cr. (Previous Year `10.33 Cr.).

10. Fixed Deposit Received includes transaction with Shri T. Venkatesan ̀ 0.13 Cr. (Previous Year Nil), Smt. Kala Venkatesan `0.04 Cr. (Previous Year Nil), Shri Vishnu Hari Dalmia Nil (Previous Year `3.60 Cr.).

11. Interest paid on Fixed Deposit includes transaction with Shri Raghu Hari Dalmia `0.84 Cr. (Previous Year `1.24 Cr.), Shri Vishnu Hari Dalmia Nil (Previous Year `0.84 Cr.).

12. Salary & Perquisities includes transaction with Shri Puneet Yadu Dalmia `4.05 Cr. (Previous Year Nil), Shri Gautam Dalmia `4.06 Cr. (Previous Year Nil).

b) Balances outstanding at year end:(` in Crore)

nature of Transaction holding company

Fellow Subsidiaries

Subsidiary companies

Associate Joint

Venture

Key

Management

Personnel/

Director

Relatives

of Key

Management

Personnel/

Director

Key

Management

Personnel

controlled

enterprises

total

Loans receivable – – 53.43 – – – – – 53.43

(–) (–) (48.96) (–) (–) (–) (–) (–) (48.96)

Amounts receivable 1.70 – 0.03 0.13 4.28 – – 0.06 6.20

(–) (–) (–) (0.45) (4.04) (–) (–) (–) (4.49)

Fixed Deposits – – – – – 0.29 0.04 – 0.33

(–) (–) (–) (–) (–) (16.10) (–) (0.99) (17.09)

Amounts payable 0.18 – – 2.45 – – – 2.75 5.38

(9.14) (1.69) (1.74) (8.06) (–) (–) (–) (3.62) (24.25)




note: Investment with related parties are disclosed in Note 13.

1. Loan receivable includes Dalmia Minerals & Properties Limited `45.00 Cr. (Previous Year `44.34 Cr.).

2. Amount receivable includes Dalmia Bharat Enterprises Limited `1.70 Cr. (Previous Year Nil), Khappa Coal Company Limited `4.28 Cr. (Previous Year `4.04 Cr.).

3. Fixed Deposits includes Shri N. Gopalaswamy `0.16 Cr. (Previous Year Nil), Shri T. Venkatesan `0.13 Cr. (Previous Year Nil), Smt. Kala Venkatesan `0.04 Cr. (Previous Year Nil), Shri Vishnu Hari Dalmia Nil (Previous Year `3.60 Cr.), Shri Raghu Hari Dalmia Nil (Previous Year `12.50 Cr.).

4. Amount payable includes Dalmia Bharat Enterprises Limited `0.18 Cr. (Previous Year `9.14 Cr.), DCB Power Ventures Limited `2.45 Cr. (Previous Year `8.06 Cr.), Keshav Power Limited `2.52 Cr. (Previous Year `0.90 Cr.), Dalmia Bharat Sugar and Industries Limited Nil (Previous Year `2.71 Cr.).

43. Information in respect of Joint venture – Khappa coal company Private Limited(` in Crore)

s. no. Particulars 2011–12 2010–111 Proportion of Ownership Interest 36.73% 36.73%2 Country of Incorporation or Registration India India3 Accounting Period ended 31.03.2012 31.03.20114 Current Assets 0.55 1.025 Non-Current Assets (including capital work in progress) 5.55 4.846 Current Liabilities 0.02 0.027 Non-Current Liabilities 4.28 4.048 Income – –9 Expenses – –10 Contingent Liabilities 1.43 1.4311 Capital Commitments – –

Note: The above details represent Company’s 36.73% share in the Joint Venture.

44. The Company has entered into definitive agreements with Calcom Cement India Limited (‘Calcom’), Saroj Sunrise Private Limited (‘SSPL’) (a Company owned by the promoters of Calcom) and the promoters of Calcom whereby the Company has initially acquired 14.59% and would be ultimately acquiring 50% stake in the Equity Share Capital of Calcom. The agreements also provide for board representation and assignment of voting rights to the extent of 50% to the Company till the ultimate shareholding of 50% is acquired. A part of the agreements has already been executed whereby the Company has invested an amount of `27.93 Cr. and `59.00 Cr. respectively in the Equity Shares of Calcom and Optionally Redeemable Convertible Debentures (‘OCDs’) of SSPL. Subsequently, Calcom has been restrained by an interim order passed by the Hon’ble High Court of Calcutta on a petition filed by Guarant Co. Limited, among other things, to make any change in its ownership, control, management of the business and Memorandum and Articles. In view of the said order the above arrangement is not binding upon Calcom Cement India Limited.

The OCDs are non interest bearing and are secured by the pledge of 108,705,790 equity shares of Calcom held by SSPL. If certain conditions for performance by promoters of Calcom are met, these OCDs are convertible into equity shares constituting 0.01% shareholding of SSPL, else the Company has an option either to get the debentures redeemed for an aggregate amount of `59.00 Crore or convert into equity shares constituting 99.99% shareholding of SSPL.

This being a long term strategic investment acquired in the current year at fair market value, in the opinion of the management, no provision for diminution in value of investment is required to be made as per Accounting Standard 13, “Accounting for Investments” notified under the Companies (Accounting Standards) Rules 2006 (as amended).




45. In the opinion of the management there is no reduction in value of any assets, hence no provisions is required in terms of Accounting Standard 28 “Impairment of Assets”.

46. Previous year comparatives

Till the year ended March 31, 2011, the Company was using pre–revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended March 31, 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable to the Company. The Company has reclassified previous year figures to confirm to this year’s classification.


For S. R. Batliboi & co. For S. S. Kothari Mehta & co. For and on behalf of Board of Directors of

Firm Registration No. 301003E Firm Registration No. 000756N Dalmia cement (Bharat) LimitedChartered Accountants Chartered Accountants

per Manoj Gupta per Arun K. Tulsian Puneet yadu Dalmia y. h. DalmiaPartner Partner Managing Director Director

Membership No.: 83906 Membership No.: 89907 Vipin Agarwal Manisha BansalPlace : Gurgaon Place : New Delhi Executive Director CompanyDate : May 16, 2012 Date : May 16, 2012 (Finance) Secretary




cash Flow Statement for the year ended March 31, 2012

(` in Crore)2011–2012 2010–2011

a. cash Flow from operating Activitiesnet Profit before tax 256.36 39.04AdjustmentsDepreciation / Amortisation 160.41 153.98Provision for doubtful debts/ advances 0.22 5.43Bad Debts written off 0.28 0.63Dividend Income (22.59) (10.33)Finance Cost 150.96 171.15Interest Income (7.45) (2.31)(Profit)/Loss on sale of Investments (4.77) (13.85)Assets Written off / Loss on sale of assets 5.28 0.02operating Profit before working capital changes 538.70 343.76Adjustments for working capital changes :Inventories 37.74 (87.17)Trade and Other Payables 20.97 (47.14)Trade and Other Receivables (79.33) (2.96)cash Generated from operations 518.08 206.49Direct Taxes Paid (79.43) (1.92)net cash from operating activities 438.65 204.57

b. cash Flow from Investing ActivitiesPurchase of fixed Assets (78.76) (36.03)Proceeds from sale of Fixed Assets 6.80 0.06(Purchase)/ Sale of Current Investments (net) (294.92) 8.50(Purchase) of Non Current Investments (225.82) –Interest Received 7.44 0.96Dividend Received from Current Investments 12.26 –Dividend Received from Non Current Investments 10.33 10.33net cash used in Investing Activities (562.67) (16.18)

c. cash flow from Financing ActivitiesProceeds / (repayment) of Short term Borrowings 186.88 (25.40)(Repayment) of Long term Borrowings (243.36) (193.18)Proceeds from issue of shares – 500.00Share issue expenses – (3.38)Finance Cost (150.81) (171.44)net cash from / (used in) financing activities (207.29) 106.60net increase in cash and cash Equivalents (A+B+c) (331.31) 294.99cash and cash Equivalents (opening Balance) 376.22 0.21cash additions pursuant to Scheme of Arrangement – 81.02cash and cash Equivalents (closing Balance) 44.91 376.22change in cash and cash Equivalents (331.31) 294.99

Note: 1) Cash and Cash Equivalents components are as per Note 18. 2) Previous year figures have been regrouped/restated whereever considered necessaryAs per our report of even date

For S. R. Batliboi & co. For S. S. Kothari Mehta & co. For and on behalf of Board of Directors of

Firm Registration No. 301003E Firm Registration No. 000756N Dalmia cement (Bharat) LimitedChartered Accountants Chartered Accountants

per Manoj Gupta per Arun K. Tulsian Puneet yadu Dalmia y. h. DalmiaPartner Partner Managing Director Director

Membership No.: 83906 Membership No.: 89907 Vipin Agarwal Manisha BansalPlace : Gurgaon Place : New Delhi Executive Director CompanyDate : May 16, 2012 Date : May 16, 2012 (Finance) Secretary

Corporate Office : Hansalaya Building, 11th & 12th Floor, 15, Barakhamba Road, New Delhi - 110001.Ph.: 011 - 23310121 / 23 / 24 / 25 Fax : 011 - 23313303

Email: [email protected] | [email protected]

www.dalmiabharat.com www.dalmiacement.com www.dalmiasugar.com www.dalmiarefractories.com www.dalmiapower.com

Dalmia Bharat Enterprises Limited | Annual Report 2011-12 · OCL India Limited, in which it holds...

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Transcript of Dalmia Bharat Enterprises Limited | Annual Report 2011-12 · OCL India Limited, in which it holds...